How to Buy a Foreclosed Home in North Carolina (2024 Update)

Hannah Warrick's Photo
By Hannah Warrick Updated May 1, 2024


Whether you're a property investor, house flipper, or regular home buyer, buying a foreclosed home in North Carolina can be a good opportunity to get a property for less than market value — if you know how to navigate the North Carolina real estate market.

With median North Carolina home prices up 4.57% in the past year and mortgage rates on the rise, finding an affordable foreclosure seems increasingly appealing. In this 8-step guide, we'll explain how to buy a foreclosed home in North Carolina and help you decide if buying a foreclosed home is right for you.

Get started: Match with real estate agents (with foreclosure experience) near you.

How to buy a foreclosed home in North Carolina

1. Get pre-approved for financing

The financing options available for a foreclosed home depends on what stage of foreclosure the property is in.

Usually, you can get traditional financing for pre-foreclosures and REOs, as long as the property meets the lender requirements. For example, some lenders won't fund a loan to buy a house that's in total disrepair.

When buying a pre-foreclosure, you may be operating in a tight timeframe to help the seller avoid foreclosure, so you'll want to move quickly and have the financing lined up in advance. In fact, most REO departments won't even consider your offer without a pre-approval letter from your mortgage lender.

If you want to search for financing in North Carolina on your own, you can look into the NC Home Advantage Mortgage and NC 1st Home Advantage Down Payment programs to see if you qualify for assistance or special financing terms.

Can you finance a house at a foreclosure auction?

Financing is usually not an option at foreclosure auctions, unless you're borrowing from a private investor or hard-money lender. It's more common for people to use cash to buy properties at auction. Some experienced investors use a short-term loan to cover the initial purchase and renovations, then refinance the property with a traditional lender.

2. Hire a top North Carolina real estate agent with foreclosure expertise

Buying a foreclosed home in North Carolina can be a complicated process. That's why finding a great North Carolina real estate agent who's experienced with the foreclosure process can make all the difference. They'll help you navigate the additional risks, effectively negotiate with motivated and distressed sellers, and avoid missing important deadlines during the foreclosure sale.

It's also possible your agent will have a relationship with REO departments of local lenders or other entities who deal with foreclosed homes. Having the inside track means you could be the first to put an offer on a great foreclosure listing.

Your agent will also ensure you don't miss any important deadlines and help protect you from title issues or surprise expenses.

If you're searching for a realtor who specializes in foreclosures, we recommend using a free service like Clever. Clever matches you with experienced local agents who can help you find the right property. You can also get cash back when you close.

Requesting agent matches is free, and there's no obligation. Simply fill out the form below to get agent recommendations sent straight to your inbox!

👋 Find your perfect agent now!

Finding a great local realtor is the first step in making your home buying dreams a reality. Our free service matches you with top agents from trusted brands like Keller Williams and RE/MAX.

Enter your zip code to request hand-picked agent matches in minutes. Compare your options until you find the perfect fit, or walk away with no obligation. Try Clever's free service today!

3. Find foreclosed homes in North Carolina

We recommend that most buyers stick to pre-foreclosures and REOs in North Carolina. The process for buying these foreclosure properties is more similar to traditional home purchases. Unlike foreclosure auctions, which often require you to pay cash sight unseen, homes in the other stages of foreclosure allow you to secure traditional funding and conduct your due diligence through inspections and appraisals.

The foreclosure market is tight, and you'll likely face competition. Here are a few places you can search for foreclosed homes in the North Carolina real estate market.

The best way to find foreclosed homes in North Carolina is through a service like You'll get direct access to local foreclosure listings before they hit the mass market!

Its free trial lets you access listings for seven days before purchasing a monthly subscription.

Local MLS

Pre-foreclosures and REOs are typically listed on the local MLS (e.g., North Carolina Regional MLS). To access the MLS, you'll need to work with a licensed real estate agent who can alert you before the properties appear on popular real estate sites.

If you need an agent who's experienced in foreclosure sales, Clever can match you with realtors in your area. Enter your zip code here to get started.

Government-owned foreclosures

You can find government-owned foreclosures on the HUD home store.

Local auctions

If you're experienced in real estate, have substantial cash reserves, and are willing to take the risk of buying a home site unseen, you might try an auction. Keep in mind that most auctions don't allow mortgage payments and only accept cash offers for foreclosure properties.

You can find auctions listed in the real estate or legal notices section of your local newspapers or by searching "foreclosures" on and

Consider auctions only if you're experienced in real estate, have substantial cash reserves, and are willing to take the risk of buying a home site unseen.

4. Tour foreclosures in person

Since foreclosures are usually sold as is, it's important to try and see them before submitting an offer. With pre-foreclosures or REOs, you can usually see the property in person and have it inspected. This isn't an option at auctions, meaning you have no idea what you're in for.

If you don't have time to order an inspection, you could bring in a contractor to give you a sense of what kind of work you'll need to do and how much it'll cost. For flippers and investors, this is a crucial step to figuring out the after repair value (ARV).

» LEARN: More about how ARV works

5. Submit offers

Making an offer on a North Carolina pre-foreclosure or REO is similar to making an offer on a conventional property: you submit an offer, negotiate terms, and agree on a closing date.

With a pre-foreclosure, the seller is highly motivated to sell before the house is foreclosed, so you'll want to be prepared to submit an offer quickly.

If you're looking at an REO, there are usually more specific rules for submitting offers. Each lender treats this a bit differently, but you'll want a letter of pre-approval, and you should always follow the lender's instructions for submitting offers. A good real estate agent can help you through this process.

Auctions are a different experience entirely. Since you probably won't have traditional financing, pre-approval letters won't be a concern. If it's an in-person auction, attend the auction and raise your hand when you want to submit bids. If it's online, register for the auction and enter your bids electronically.

The auction may have predetermined bid increments, minimum bids, and occasionally buyer's premiums (an additional fee). Buyers should contact the trustee running the auction to ensure they have all these details before submitting an offer.

🚨 We strongly encourage you to proceed carefully if you want to buy foreclosures at an auction. Consider attending a couple of auctions in person without bidding to familiarize yourself with the process before you start submitting bids.

Also, be aware of the upset period in North Carolina that gives other buyers 10 days to outbid the winning bid by at least 5%. If someone outbids the highest auction bid, the 10-day period resets and continues until the highest sale price is reached.

6. Conduct due diligence on the property

There are often some kind of physical or legal issues with foreclosures. It's extremely important to conduct due diligence by inspecting the property and running a title search. These measures will shield you from unexpected physical or legal issues with the property.

» MORE: Learn how inspections work and what happens after

With auctions, inspections and property viewings are generally not allowed. Your due diligence will mostly be limited to checking for a clear title, driving by the property to assess the condition of the outside and neighborhood, and preparing to make an offer at the auction.

Since foreclosed properties only exist when bills aren't paid, there's an additional risk of claims against the title. Conducting a title search ensures that there aren't liens against the property, so you can rest assured that the home is yours once you close.

7. Get the home appraised if you plan to finance it

If you need financing to buy a house, you'll need to show the lender that the investment is worth it. This is where appraisals come in.

» MORE: Find out what appraisals are and if you need one

If the appraisal comes in low, you'll need to come out of pocket for the difference. For example, if you offer $315,000 for a mid-priced North Carolina home and it appraises at $300,000, the lender will only finance $300,000. You'll need to cover the remaining $15,000 or renegotiate the foreclosure sale price.

8. Close on the purchase

The closing process for pre-foreclosures and REOs is similar to closing on conventional homes: you go to a title company, fill out the paperwork, and pay the seller for the property.

The title company will tell you in advance what's expected from you, but it helps to have an expert on your side to guide you. If you use an agent recommended by Clever, you'll have the peace of mind knowing an experienced agent has your back — and you could even get cash back at closing!

Ready to start looking at North Carolina foreclosures?

The first step is to find a great local realtor who specializes in foreclosure purchases. Our free service connects buyers like you with top-rated agents from trusted brands like Coldwell Banker and Century 21.

Fill out the form below to get personalized agent recommendations sent straight to your inbox!

Auctions are a bit more complicated. If you submit a winning bid, you need to provide the trustee with a certified check — usually 10% of the purchase price — as a deposit.

Then a Report of Sale will be filled out and filed at the county clerk's office. However, there's still a 10-day upset period when someone can outbid you.

If you make it through the upset period without being outbid, you'll need to deliver the full amount of the sale to the trustee, usually within 30 to 45 days.

🚨 Don't forget about the taxes!

In North Carolina, taxes due on a property are NOT prorated, so you'll have to pay the full amount due on them when you purchase the property. For example, if you buy a foreclosed property in December, you don't just owe taxes for that month — you owe taxes for the entire year if they haven't already been paid.

What is a foreclosed home?

A home is foreclosed when a borrower doesn't pay their debt owed and has their home repossessed to cover that debt. This occurs most commonly when someone fails to pay their mortgage payments, taxes, or both.

The term "foreclosure" is often used more generally to apply to a property in any stage of the foreclosure process: pre-foreclosure, auction, and real estate owned (REO).

Pre-foreclosure stage

pre-foreclosure is when a lender or the government issues notice to a homeowner that they must repay their debt or have their house foreclosed.

» MORE: How to buy a pre-foreclosure home (and is it a good idea?) 

Foreclosure auction

foreclosure auction takes place when the property has officially been foreclosed and the lender or government tries to sell the property at an auction to recoup the money they're owed.

REO foreclosure

If a property does not successfully sell at the auction, then it becomes a bank-owned (REO) foreclosure.

Pros and cons of buying a North Carolina foreclosure

For buyers, the biggest draw to foreclosed homes is usually the discounted sale price. But there are other advantages, particularly in competitive markets.

That said, you need to be aware of the risks that come with these properties. Title issues and physical damage are just a couple of the problems you might come across when you buy foreclosures in North Carolina.


✅ Lower purchase price

The major benefit of buying foreclosed homes is the possibility of getting them for below market value. Most sellers are in a tight place financially, so savvy buyers can leverage that to negotiate lower sale prices.

✅ Increased inventory

In a growing state like North Carolina, any opportunity to add homes to your search increases the chances of finding the right property. Considering foreclosures is a good way to expand your search.

✅ Room to build in equity

Since many foreclosures have issues or have been neglected in some way, there's often an opportunity to build in equity by renovating or repairing the home.

For example, you might buy a foreclosure for $150,000 and spend $25,000 renovating it, and it could be worth $190,000 after all the work is done. That's $15,000 of equity you just created!

✅ Faster buying process than some states

Since North Carolina is a non-judicial state, the foreclosure process goes much quicker and smoother than in judicial states. It also makes the process of buying a foreclosure significantly less complicated for interested buyers.

✅ No redemption period

Not having a redemption period means you can rest assured that when you buy a foreclosed home, it's yours — assuming you ran a title check and it came back clean.


🚫 Damaged property

Many foreclosures have been vacant or neglected for an extended period, so they may have substantial damage that needs repair. There are also occasions when distressed sellers intentionally damage property on the way out because they're angry about being forcefully removed from their home.

🚫 Ethical concerns

Some homebuyers feel like they're taking advantage of someone's misfortune when they buy a foreclosure. In this case, peace of mind outweighs the potential profit you could achieve by purchasing one of these homes.

🚫 Title issues

For a property to be foreclosed, a homeowner must fail to repay a debt for which the property is acting as collateral. However, there can be more than one kind of debt.

For example, a homeowner could fail to pay their taxes as well as their mortgage payments to their lender. In this case, both the government and the lender have a claim to the property — also known as a lien.

When buying foreclosures, always run a title check to see who has a lien on the property and to ensure the title is clean.

🚫 Inheriting tenants

Due to the Protecting Tenants at Foreclosure Act of 2009, you're required by federal law to honor the lease for tenants in a North Carolina property if you buy a foreclosure and intend to rent it out. If you plan to live there, you still need to give tenants 90 days to vacate.

🚫 Upset period

Although North Carolina doesn't have a redemption period for previous owners to re-take possession of their property, it does allow anyone to outbid your winning bid at an auction within 10 days if it's at least 5% over your bid.

Stages of a foreclosure in North Carolina

The basic stages of foreclosure in North Carolina are pre-foreclosure, auction, and REO property. We recommend that you stick to pre-foreclosures and REOs if you're not a professional investor, since auctions can be risky and cash-intensive.


The pre-foreclosure process begins after a borrower has missed multiple months of mortgage payments and is issued a notice of default by their lender. Most lenders in North Carolina choose non-judicial foreclosures because they can foreclose on properties with delinquent payments much quicker than in the judicial process.

The pre-foreclosure window may be as little as 90 days before the property is scheduled for a foreclosure auction, so be ready to close fast.

Foreclosure auction

If a property doesn't sell during the pre-foreclosure period, it goes to foreclosure auction. In North Carolina, foreclosure auctions must be publicly advertised for at least 21 days before the auction takes place.

These sales usually occur at the county courthouse or online. You can find the details of where and when on the posting that alerted you to the auction.

If you submit the winning bid, you'll need to give the trustee a certified check for the deposit, which is usually 10% of the winning bid. Then you have to wait 10 days to see if anyone outbids you during the upset period before you pay the full amount and receive the title to the property.

Generally, you have 30 to 45 days to pay the full amount to the trustee.

Popular areas for purchasing foreclosed homes at auction include:

Real estate owned (REO) foreclosures

If a property doesn't sell at auction, the lender or government takes possession of the property — these are called REOs.

REOs are good properties for buyers who want to avoid taking advantage of distressed sellers or the risk of buying site-unseen homes at an auction. That said, there can be significant delays in dealing with REOs, so these are not for buyers who are in a hurry.

In fact, in North Carolina it can take anywhere from 6 to 18 months for a property to complete the foreclosure process and be moved to an REO department.

» MORE: Learn about HomeSteps for financing REOs in North Carolina

Another important thing to remember is that REOs have failed to sell as pre-foreclosure homes or at auction. That usually means there's something wrong with them.

As such, buyers should be prepared to do substantial renovations on the property, regardless of whether they want to rent it, flip it, or live in it.

North Carolina foreclosure laws for buyers

The foreclosure laws in North Carolina generally favor the buyers, though not always.

North Carolina foreclosures are usually non-judicial, meaning the properties do not require the lender to sue the borrower. This makes the process go much smoother and faster.[1]

Deficiency judgements are available to lenders, which means they can accept lower payment on a foreclosed property than is owed on it — also called a short sale.[2] However, banks can take weeks or even months to respond to a short sale offer, so don't expect this to happen quickly or easily.

There's no redemption period for the previous owner of a foreclosure in North Carolina, but the 10-day upset period following a foreclosure auction allows anyone, including the former owner, to outbid the winner by at least 5% to gain ownership of the property.

Due to the Protecting Tenants at Foreclosure Act, investors who buy properties with tenants in place must honor the original lease. Anyone who intends to live in the home must give the current tenants at least 90 days to vacate the property.[3]

Should I buy a foreclosed home in North Carolina?

The decision to buy a foreclosed property or not depends on your circumstances and the type of foreclosure you're interested in.

We recommend that buyers who are in a hurry focus on pre-foreclosures, because those are more likely to close quickly and allow for conventional financing.

Buyers who want a standardized experience working with professionals should consider REOs as a primary focus. These transactions go slower, but REO departments handle foreclosures all the time and have a tried-and-true method of selling them.

Avoid auctions unless you're a professional investor, flipper, or contractor. Auctioned foreclosures usually require substantial cash upfront and may need significant rehabbing.

If you decide to buy a foreclosed home, we recommend working with an experienced real estate agent who can help you get the first crack at great opportunities and avoid money pits.

Reach out to one of Clever's recommended agents to see how they can help you find and buy your next home.

👋 Compare hand-picked agents, get incredible savings

Find top-rated agents from local brokerages, and get HUGE savings when you buy or sell a house:

  • Sell your house for just 1.5% in listing fees
  • Buy a qualifying home and get cash back

Clever's service is 100% free, with zero obligation. Interview as many agents as you like until you find the perfect fit — or walk away at any time.

FAQs about buying a foreclosed house in North Carolina

How does buying a foreclosed home work in North Carolina?

There are three main stages to foreclosure in North Carolina: pre-foreclosure, foreclosure auctions, and real estate owned (REO) foreclosures.

Buying pre-foreclosures or REOs is a lot like buying conventional homes — you find a property, make a written offer, negotiate terms and price, and then close.

Buying foreclosures at auctions requires registering with the trustee, attending the auction, bidding on a property, and paying for it in cash or certified funds.

How do you find foreclosures in North Carolina?

You can find foreclosures and pre-foreclosures on You can also find them on the MLS by searching with foreclosure filters, but you'll need a licensed real estate agent to help you access the MLS.

You can also check your local newspaper or the bulletin boards in the county courthouse for foreclosure auctions, because the law requires North Carolina foreclosure auctions to be publicly advertised for at least 21 days.

Are foreclosures worth buying in North Carolina?

For many buyers, feeling like they're profiting from someone's misfortune makes buying foreclosures not worth it, particularly since the homes may need additional work.

That said, foreclosures can result in below market sale prices and opportunities for sweat equity, so they can be worth it to patient buyers who wait for the right property to come along.

How long does it take to buy a foreclosed home in North Carolina?

If you're buying a pre-foreclosure or an REO in North Carolina with conventional financing, you'll need an inspection and appraisal, so closing will take at least 30 to 45 days.

REOs in North Carolina can take 6 to 18 months just to complete the foreclosure process and reach the REO department.

Auctions have a 10-day period when you can be outbid. After that, you can pay in full and receive the title in days.

Why trust us?

Clever strives to provide the most up-to-date, accurate, and useful information available for our readers. We've done extensive research to locate and verify this information, and we've also consulted one of our top agents who has experience buying foreclosures.

We’ve earned buyers’ trust with a rating of 5 out of 5 stars on Trustpilot and over 3,000 customer reviews in total.

Our team of industry-leading researchers is committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.

Note: When you work with one of our partners, we may earn a small commission. Learn more about our editorial policy and how we make money.

Related links

Article Sources

[1] – "North Carolina Foreclosure Laws and Procedures". Accessed May 1, 2024.
[2] – "Injunctions; Deficiency Judgments". Accessed May 1, 2024.
[3] – "Protecting Tenants at Foreclosure". Accessed May 1, 2024.

Authors & Editorial History

Our experts continually research, evaluate, and monitor real estate companies and industry trends. We update our articles when new information becomes available.

Better real estate agents at a better rate

Enter your zip code to see if Clever has a partner agent in your area
If you don't love your Clever partner agent, you can request to meet with another, or shake hands and go a different direction. We offer this because we're confident you're going to love working with a Clever Partner Agent.