When you get approved for a loan from a lending company, you are normally required to offer an assurance of payment. This is commonly a piece of real property whose value corresponds to that of how much you are borrowing. In case you don’t meet the requirements of the lender for repayment, the bank is going to have the legal right to repossess or obtain the deed of the real estate. This act of technical default is what’s known as a foreclosure.

In the U.S., there are 2 kinds of foreclosure. Depending on which state you reside, the lender or banking company can enforce either a "strict foreclosure" or simply a "foreclosure." A strict foreclosure lets the bank or creditor to wholly own or own the title or deed of the property as complete payment for the loan it gave a person or business enterprise. Otherwise, upon failure of a person or business owner to complete the repayment schedule, the court of justice -through the sheriff or other officers- is given the right to auction the property.

The bank or lender that lent the money normally extends their bid on the property in this public auction. The public may become aware of this bidding through announcements or a disclosure of a list of real estate properties foreclosed.

Real estate brokers frequently get foreclosure lists and bid for the real estates. Nearly all of foreclosed properties are auctioned at the amount or value of the loan that the original owner had. Thus, the value can be lower than its real market value. By reselling these properties, the agents often make a few thousand dollars more.

More enterprising agents look at pre-foreclosure listings for other real estate properties. Preforeclosure listings include houses that aren’t yet foreclosed or offered to the public for auction. You can have access to this info by joining or starting accounts on a number of sites dedicated to offering info on foreclosed houses.