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3 Ways to Buy a San Diego Foreclosure

3 Ways to Buy a San Diego ForeclosureWith the number of foreclosures in San Diego on the rise, now is an important time to understand how to purchase a great foreclosure. With San Diego having some of the most expensive homes on the market in the U.S., a foreclosure provides a homebuyer the opportunity to purchase a home at a cheaper price.

Foreclosures in San Diego come in three forms: pre-foreclosure properties, foreclosure auction properties, and bank owned or real estate owned properties.


Pre-closure properties occur when the buyer defaults on their loan. They are issued a Notice of Default, which lasts a minimum of 3 months. During this period, the borrower has to fix the delinquency that caused the Notice of Default, whether that means making payments or trying to secure a loan.

Advantages of buying pre-foreclosure property:
1. Property inspections are permitted.
2. Payment in all cash is not required.
3. Title insurance can be obtained.
4. For the most part, evictions are not required.
5. The risk is low.

Disadvantages of buying pre-foreclosure property:
1. Sellers can be difficult to find and contact.
2. The price can be unreasonably high.
3. Real estate agents may not be part of the process.


Foreclosure auction properties are most commonly sold outside the courthouse in downtown San Diego. This is a more informal method of buying a foreclosure.

Advantages of buying a foreclosure auction property:
1. Limited competition for buying the foreclosed property.
2. Great discounted homes.

Disadvantages of buying a foreclosure auction property:
1. Property inspections are not permitted.
2. Payment is in all cash (through a cashier’s check).
3. The risk is high for the great bargain.
4. Title insurance cannot be obtained.
5. Evictions may be required.


Bank owned/real estate owned properties are foreclosures that are returned to the bank or the real estate agency because of the customers’ inability to meet the financial requirements.

Advantages of a bank owned/real estate owned properties:
1. Property inspections are permitted.
2. Payment in all cash is not required.
3. Title insurance can be obtained.
4. For the most part evictions are not required.
5. The risk is low.
6. Great discounted homes.

Disadvantages of a bank owned/real estate owned properties:
1. The process can be slow.
2. Banks determine the contract, offering less advantages to the buyer.
3. Inspection periods are shorter.

The San Diego Multiple Listing Service (MLS) provides information on foreclosures currently available. Buying a foreclosure provides a homebuyer with an opportunity to buy a great bargain! Weigh the advantages and disadvantages of each type of foreclosure to make the right decision.

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