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Metro Atlanta has topped the nation's foreclosure list for several years. Last month, the area ranked No. 8 for the highest number of foreclosures (when lenders take back a home once an owner can no longer pay the mortgage) in the nation, according to RealtyTrac, a national foreclosure database.

"It'll probably be 2008 before we begin to see foreclosures slow down," Frank Alexander, a housing expert and law professor at Emory, has told CL.

Let's be honest: A foreclosure means someone has lost a home, and that's nothing to get excited about. What it also means, though, is that the house is for sale – and at a great price nonetheless. Housing experts say most foreclosed homes sell at 10 percent to 40 percent below market value.

But buying a foreclosed home is trickier than simply purchasing through a real-estate agent. First of all, many foreclosed homes need major renovations – usually because the previous homeowner didn't have enough money to keep the house, period, let alone in good condition. Also, individuals who purchase foreclosed homes aren't always afforded the same disclosures as those who buy properties on the market. For example, it can be difficult to get the house inspected, so there's no telling how old the appliances or heating and cooling systems are or if the roof is in good condition. As a result, home buyers who purchase foreclosed properties can have trouble obtaining a mortgage because mortgage companies usually require property inspections before approving loans. Since it's high-risk, housing experts advise first-time home buyers to steer clear of foreclosed homes.

But experienced home buyers – those who don't mind rolling up their sleeves to do some fixer-upper work – can get a steal on some great properties, says Todd Mark of the Greater Atlanta Consumer Credit Counseling Service. Especially with the right knowledge of how foreclosures work and the options available.

Every month in Georgia, foreclosed properties are auctioned off on each county's courthouse steps; in Fulton County, it occurs on the first Tuesday of the month. About four weeks before going to auction, says Bill Brennan, an Atlanta Legal Aid Society attorney, properties must be publicly listed in the county's legal papers, such as the Fulton County Daily Report.

"There are thousands of listings each month," Brennan says. "It's astounding how many properties are available."

In July, for example, there were more than 4,000 listed on the Daily Report's website.

Fulton County auctions typically last about six hours, from around 10 a.m.-4 p.m., rain or shine. The buzz revs up around 11 a.m., when most of the real-estate investors, interested home buyers and law firms who represent the lenders have gathered outside. It's essential to pay attention at auctions. The bidding process starts without any bells or whistles as attorneys casually stand on the steps, whip out a piece of paper and start to read each property's fine print quickly and monotonously. Often, several attorneys will auction off properties at the same time, leaving people to dart up and down the stairs, from lawyer to lawyer, to pick up bits and pieces of information. In order to stay on top of a specific property, find out which law firm will be auctioning it off and note the parcel ID. Hungry and savvy real-estate investors usually swarm the courthouse steps to gobble up as many homes as possible. Don't be surprised as people elbow their way into a tight circle around the lawyer and yell at him or her to speak up. Finally, be prepared to pay immediately: Properties bought at auctions must be paid for in cash.

For individuals who want a good deal with less risk, real-estate-owned property is a good option. Real-estate-owned property is any home that real-estate investors or banks bought at auction and are reselling. On RealtyTrac, for example, more than 6,500 bank-owned properties were up for grabs as of the end of July. The real-estate route offers a home buyer the chance to have the house inspected and therefore qualify for a mortgage. Sure, the price won't be as deeply discounted, but it's a much safer option.


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