How to buy a distressed home
Every way in, from a missed payment to a government sale. Each guide gives the steps, what can go wrong and who you need on your side.
Updated November 2026. Plain language, not legal advice.
How to buy a house in foreclosure
You can buy a house in foreclosure at three points. Before the sale, you buy from the owner. At the sale, you bid at the trustee or sheriff's auction, usually with cash. After the sale, you buy the bank-owned or HUD home through an agent, often with a regular loan.
How to buy a pre-foreclosure
You buy a pre-foreclosure from the owner, before the foreclosure sale. Find the default notice, reach the owner with care, confirm what's owed on the home, and close before the sale date. If the owner owes more than the home is worth, the lender has to approve a short sale.
How to buy a foreclosure at auction
At a foreclosure auction, a trustee or sheriff sells the home to the highest bidder, at the courthouse or online. Find the notice of sale, research the title, bring the funds the sale requires, and bid only up to your number. You usually can't go inside first, and the home is sold as-is.
How to buy a bank-owned home
A bank-owned home, or REO, is one the lender took back when it didn't sell at auction. The bank lists it with an agent, so you buy it much like any listing: get pre-approved, inspect, and make an offer. Expect an as-is sale and a bank addendum that changes some contract terms.
How to buy a HUD home
HUD homes are homes with FHA loans that went to foreclosure and are now sold by the U.S. Department of Housing and Urban Development. They're listed on HUD Home Store, and you bid through a HUD-registered real estate broker. Buyers who will live in the home get to bid first, then investors can bid.
How to buy a short sale
In a short sale, the owner sells for less than they owe and the lender agrees to take the loss. You make an offer like any listing, then wait for every lender on the home to approve it. Expect it to take longer than a regular sale, and know the lender can still say no.
Not sure which one fits?
Check how your county's market is leaning, then browse the deals near you on the map.
- See the glossary
New to the words?
Plain definitions of the terms in these guides, with Nevada, Utah and Texas rules.
Experts we work with
Local agents who work distressed and off-market homes, and a lender to call before you bid. Ask through us and we'll introduce you by email.
Robert Meche
Broker and owner, SWR Group at Keller Williams
Collin County, TX, Dallas County, TX, Denton County, TX, Cooke County, TX
Buying somewhere else? Tell us the county and we'll point you to someone.
Recommended lender
Cole Boren
Branch Manager, CMG Home Loans
Cole has nearly three decades in mortgage lending. He helps buyers plan a purchase around the bigger picture: the cash they keep, the home they own now and the timing of the move.
- What you can qualify for now
- Buying before you sell
- Which loan fits the home you want
Cole Boren, NMLS #384591. CMG Home Loans, NMLS #1820. Equal Housing Opportunity. Licensing varies by state. Check his NMLS record.
Real Estate Intel recommends people we work with. You're free to use any agent or lender.