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WSJ Article - Beyond Auctions: Ways to Buy Foreclosure Homes

A good article in the Wall Street Journal on buying foreclosed homes.    It states:
Despite the growing number of foreclosures across the country, there are few bargains to be found at auctions. For one thing, you'll be competing against savvy local investors who know how to gauge a property's real value. What's more, many properties are mortgaged so steeply that banks often ask for bids that are higher than the properties are worth.
So be careful buying a foreclosure.  Compare to the price of non bank-owned properties--run your comparables.  The Wall Street Journal does state that a way to get a better deal might be to buy a home "preforeclosure"--before the bank has foreclosed on it--the original home owners are more motivated than a institution. 
Banks holding firm on prices should change as the number of foreclosures grow.  According to Lehman Brothers, the number of foreclosures is expected to quadruple this year, adding one million properties to the marketing in 2008 and again in 2009. 

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