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© Casey Serin

The developer Beazer Homes is buying up bank-owned or auctioned foreclosure properties in Phoenix, Arizona and converting them into rentals with the Beazer name. According to a company spokesperson, this is a way for the developer to put their corporate bank accounts to work during a sluggish market for home sales.

The company's stated goal is to own 100 homes in the Phoenix area by the end of September, 2011. Beazer is only buying homes in communities that have been built since 2004, and that are close to their own development communities. Phoenix is the first market where the company is testing this strategy, called the Pre-Owned Homes Division, but the concept may be extended to other metro areas as well. Beazer is competing against other investors and home buyers, but only for homes that are in excellent condition.

© Casey Serin

Foreclosure auctions are open to the general public, and the highest bidder on a property must pay for that property in cash at the auction. They are then given a deed that must be recorded with the county recorder's office. Each state conducts its foreclosure sales slightly differently.

In some states foreclosures are conducted by the Sheriff at the county courthouse, while in others sales are conducted by private trustee sales or auction companies at the property. Some foreclosure properties can be purchased at online auctions, too. You should always check the foreclosure laws of the state in which you are buying property. Checking the local newspaper is a good way to find out about public foreclosure auctions, but notices will also be posted at the county courthouse. You can also find information on upcoming auctions from many sources online.

© Casey Serin

Buying a property in foreclosure is viewed by many prospective home buyers to be a great bargain, but this is not always the case. While the list price for foreclosed properties will usually be somewhat below market value, the banks will always try to avoid selling them at a ridiculously low price.

When setting the sale price on a property, the lender typically does an assessment of the property's condition and sets the price accordingly. Therefore, buyers should be aware that they will be financially responsible for any required repairs. These properties often need repair work because they are sold as is, and banks are not required to disclose issues to buyers as happens in a traditional sale. That's why the home inspection is invaluable in a foreclosure property. It's important that foreclosure buyers act quickly when they find the right property, because the foreclosure market moves fast and other potential buyers are likely looking for the same type of properties.