The bank foreclosure process is not a pleasant one for any of the parties involved. That said, however, if you are lucky enough to have been able to avoid it – that is to say, if you are simply an observer on the sidelines – there are ways for you to benefit from the recent spate of foreclosures that have been taking hold of the North American economy since the beginning of the recession.   Generally, everyone involved in a foreclosure wants to avoid it. The people on the receiving end of a foreclosure hate it, of course, because it places them under the threat of losing their home, and obviously nobody wants that. However, they are generally unable to avoid it because they are no longer able to continue making their payments on a regular basis.

Similarly, banks want to avoid house foreclosure because it is a very expensive process for them (a foreclosure involves banks hiring a lot of very expensive experts, such as legal and financial experts). In most cases, banks are forced to resell the foreclosed home at a fraction of its book value – in other words, after the costs of the foreclosure process are taken into account, the bank LOSES money on the home. Add to this the fact that the sheer number of foreclosures in the last few years has reduced the number of buyers available on the market, and you see that the average selling price of homes has reduced.

This means, of course, that those lucky few who are in a position to be able to afford a home right now are sitting pretty. They will be able to reap the rewards of everyone else’s insolvency by purchasing a home at a very reasonable price. The only advice we can give you, if you are going to purchase a foreclosed home, is to examine it from top to bottom and ensure that you know what you are getting. There are a lot of bargains out there, but certain homes are not quite what they seem.