The best places to find a cheap foreclosure are private auctions, sheriff's or trustee's auctions, and directly from a bank, as stated by About.com. Very few foreclosures are available through the Multiple Listing Service, and those that are available in the MLS often spur a competitive auction.
Local newspapers and auction websites post notices of both private and sheriff's auctions. At a private auction, buyers are often permitted to use financing to purchase an inexpensive foreclosure, and buyers are also frequently allowed to use an agent to represent themselves. Depending on the company, prospective buyers sometimes have a chance to inspect the home before the bidding process begins. It is important to keep a realistic price limit in mind when bidding, according to About.com.
With sheriff's or trustee's auctions, buyers generally pay cash and purchase the home "as is," which means that no inspection is permitted and that the buyer understands that he is paying for the dwelling in its existing condition. It's wise to have a title company perform a search before the bidding to ensure that there are no liens out against the home. If liens are present, such as from tax agencies, homeowner's associations or other loans, those come with the house, notes About.com.
Many banks maintain online listings of homes that they own through foreclosure, and a price break is often available if buyers are looking to buy more than one house at a time. The HUD website also has a list of homes that HUD has had to take over, which are also available for inexpensive sale, reports About.com.