A foreclosure occurs when the owner of a property can no longer afford the costs associated with it, and the bank or another creditor seizes the property. This is often a result of the owner initiating bankrupcy proceedings.

Although it is obviously a very unpleasant opportunity for the former homeowner, forclosures do present an interesting opportunity for real estate investors. This is due to the fact that the creditors selling the property are usually just interested in getting it off their hands as quickly as possible, and are often willing to settle for a price of below market value.

This makes it possible for investors to secure good properties at what would normally seem like an extremely low sale price.

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Jeremy Maddock is the webmaster of FinanceFacts.info, a useful source of finance articles.