As Steve McLinden wrote in a recent bankrate.com article, “foreclosure buying is a very competitive game right now,” so you have to arm yourself with education to take advantage of buying foreclosures.

First, you should know the definition of foreclosure. Investor Dictionary.com defines foreclosure as “A legal process by which the lender seizes property of a homeowner, usually due to the homeowner not making timely payments on the mortgage." In other words, if you fail to meet the obligation of your payment schedule, the lender can use a legal process to take the property from you.

This legal process is determined by whether or not the state you live in is a judicial or non-judicial state. If you live in a judicial state, the lender may choose to take the property back with a deed in lieu of foreclosure or use court proceedings to foreclose on the property. If you live in a non-judicial state, the lender will follow foreclosure procedures established by state statute without court proceedings.

How do you know if your state is a judicial or non-judicial state? You should be able to find the answer at your county clerk’s office. If the civil division of the county clerk’s office has procedures for mortgage and lien foreclosure sales, then you are in a judicial state. With the popularity of the Internet, many local government agencies will have this information readily available online. If not, call your county clerk’s office to get the information.

Once you know what a foreclosure is and what legal process your state uses to foreclose on property, you’ll be ready to take the next step.