Most people are aware that you can buy real estate directly from the owner or through an auction. What you may not know is that you can take ownership of a property via a quit claim deed, foreclosure, and/or a short sale. Here is how to acquire property through any one of these routes.
With a quit claim deed in hand, the owner signs off on the property. He or she legally states that he/she has no interest in the property and has no intentions in staying in or on the property a moment longer. In essence, the owner is signing the property over to you, and you are taking ownership of it. In some states this is enough to acquire the property, but in other states it puts the owner in a bind because he/she still has his/her name on the mortgage even though he/she still has to vacate the property. Make sure you know the laws in your state before asking an owner to sign a quit claim deed and taking over a property.
In a short sale, the owner sells you the property, but only for what the property is valued at. The current fair market value stamped on city or township tax records is the legal sale price in a short sale. If there is any debt above and beyond that remaining on the home, the owner assumes responsibility and/or the mortgage lender erases that debt in order to acquire the value of the property paid in full by you, the buyer. It works out as a win-win for everyone about half the time, and the rest of the time the owner still walks away with some debt to repay. However, you get a property at face value, no more and no less.
There are two kinds of foreclosure. The first involves missed mortgage payments and the second involves missed tax payments on the house. In the former, the mortgage company can foreclose and sell off the home for what is owed. In the latter, the county/state takes ownership of the property for back taxes owed and sells off the property, usually for the back taxes and a little extra to recoup the losses in buying the property from the mortgage lender. This is one way in which buyers can acquire property very cheaply and then flip it or turn it into rental properties. Notices in regards to foreclosures are often posted in city hall and/or local newspapers.