When you get a loan from a bank, you are usually required to put up an assurance of payment. This is usually a piece of real property whose value matches that of the amount you are borrowing. In the case that you fail to meet the requirements of the bank for repayment, the bank will have the legal right to repossess or get the deed of the real property. This act of technical default is called a foreclosure.

In the United States, there are two types of foreclosure. Depending on the state that you are in, the creditor or bank can enforce either a "strict foreclosure" or just a "foreclosure." A strict foreclosure allows the bank or creditor to fully possess or own the title or deed of the property as full payment for the loan it granted an individual or business entity. Otherwise, upon failure of an individual or business entity to complete the repayment schedule, the court -through the sheriff or other officers- is given the right to auction off the property.

The bank or creditor that lent the money usually offers their bid on the property in this public auction. The public may know of this bidding through announcements or a disclosure of a list of properties foreclosed.

Real estate brokers often get foreclosure lists and bid for the properties. Most foreclosed properties are auctioned off at the amount or value of the loan the original owner had. Thus, the value may be lower than its true market value. By reselling these properties, the brokers often earn a few thousand dollars more.

More enterprising brokers look at pre-foreclosure listings for more properties. Preforeclosure listings feature properties that are not yet foreclosed or offered to the public for auction. You can have access to this information by joining or opening accounts on several websites dedicated to offering information on foreclosed properties.