Foreclosure - how does it work

[ggonzo]

How does a foreclosure works? How do you purchase a home that is in foreclosure? Have you done this and is it a good investment?

[trent]

I'm sure that buying a property in foreclosure may be both good and bad investment. You have to be on top of the real estate market and pay substantially lower compared to the market value of comparable properties if you want to make money. Even if you buy low, the market still can surprise you on the downside, so you have to be ready to unload the property quick.

[heyjude]

Do you think the government will step in and help the people who are facing foreclosure? Can they stop the foreclosures?

[Canadian]

Do you think the government will step in and help the people who are facing foreclosure? Can they stop the foreclosures?

The only thing that can stop foreclosures is clearing out bad debt that cannot be repaid in any other way, except defaulting on it. The house prices have to become affordable again if you want buyers to step in and absorb the sharply increasing house inventory on the market. Until that point has been reached, expect more foreclosures, more houses on the market, less sales and decreasing housing prices.