I’m know you’re in tune to the worries of recession and the real estate crisis going on in the US. This has caused a flooding of foreclosures that is surpassing previous highs. Although you still see older foreclosed homes in run down areas, what’s different during this crisis is the quality of forclosed homes and neighborhoods they reside have drastically improved. Even some of the nice estates in wealthy neighborhoods can be found at government auctions for prices much lower than market value.

There are some great values out there but in order to take advantage of them you should first be aware of both the advantages and disadvantages of buying a foreclosed home at a government auction versus the conventional method using a realtor.

Here are some advantages to purchasing a foreclosed or pre-foreclosed home:

- The main advantage in purchasing a foreclosed home is the below market price.

- Many of the homes are in great condition for what you pay.

- The selection range of home available to choose from is extensive.

- No middle man (Realtor) to have to go through or additional fees to pay (although you should consult with someone along who can inspect the home(s) for you).

- Some insurances are optional. It could save you hundreds a month.

- Great investment opportunity (i.e. rent out or flip that house)

- Less risky then the stock market, as you own something tangible

Disadvantages:

- Mortgages may be harder to get (unless you have great credit with your bank).

- You need to be aware of any existing liens, judgements, or unpaid taxes still on the property.

The main caution is to properly check that the property is free and clear of any debt ahead of time. Also know in advance when the government auction expects payment for the house and have the loan details worked out with your bank. As with purchasing any house if you have enough cash handy (who does) that makes your profit potential much greater.

Government auctions are being held all around the US and Canada. You can find information about upcoming auctions and pre-foreclosures (homes you can buy before the auction) on the internet along with detailed listings on the homes that will be for sale. Purchasing a home through a government auction can be a very rewarding adventure but doing your research ahead of time will allow you to be prepared. In fact I would recommend attending a few auctions before you are ready to purchase so that you become familiar with that environment.