12: Purchasing Alternatives

Obtaining a mortgage is probably the most common method of purchasing a property, but it is not your only option. This section discusses the pros and cons of various purchasing alternatives, such as foreclosures, public and private auctions, tax sales and purchasing from lenders, nonprofit programs and federal and local government agencies. These options are for the adventuresome, or for those who must make their dollars stretch.

Be prepared to do a little more leg work in educating yourself about these purchasing options, or in locating professionals who can. Seek a lawyer's advice to navigate these tricky waters.

Information presented here is not intended to be a detailed study or how-to-guide, but is a basic introduction to “alternative” methods of locating and purchasing real estate. These options usually involve more risk and time than conventional methods. Points to consider:

• The title of the property may have other liens against it, such as property taxes or second mortgages. The title is the legal document that denotes ownership of the property; liens are claims against the property, which may hinder or delay ownership or possession.
• The property might require extensive rehab and repairs.
• You might end up responsible for taking possession of the property (i.e. evicting current tenants.)