I see about a million websites that promise you super deals on foreclosures, but who the hell knows which ones are reputable and which are bullshit? Does anyone know how one goes about seriously looking for foreclosures? Is online even worth a try? Is it better to go to a realtor? What does one do when one is looking for a deal on a foreclosure, but doesn't want to get ripped off?
First off......by all means, DO inspect the property AND protect your investment by an owners policy for title insurance. A lenders policy is normally what you see on the Hud, but this only protects the lender, not you. You don't want Joe Blow's uncle staking claim to the property for some silly note that wasn't picked up in a title search as a lien against it. Likely? Nah. Possible? Yeah.
Kicky ... A good place to start is with your sheriff's office. Here where I live, all the upcoming auctions for foreclosures are listed on their site, along with the auction date. This is all online. If it's not online in your area, call them to see if you can get a list. Here's what mine looks like where I live. Sheriff's Office
When you click on that, look to the left and you will see sheriff's sales listed under resources.
It is cool to look for NOD's (notice of defaults) and if you are really interested, you can try and do a short sale PRIOR to the auction even happening. This way there are no bidding wars and you can generally get a cheap price this way too. NOD's are recorded. You would need to go to your county courthouse OR see if they are listed on the recorders site online. There is way too much for me to even try to type here, giving you tips on handling short sales. Some real estate agents do get properties in where the owner is trying to avoid a foreclosure and will list with a real estate agent ....and from that point, an offer to purchase is used in the negotiations with the bank to get them to settle for less. A couple years ago, I did the financing for a client of mine that purchased a home through a short sale. The payoff on the property was 186,000. The bank accepted a payoff of 118,000. All he needed was a purchase contract signed and my opinion letter and it was a done deal shortly after the bank accepted the offer. It was sweet and easy. Sometime short sales are hard to get done. Just depends....but worth a shot. Especially these days when foreclosures are huge on their books. I had another client purchase a home that was valued at 190,000. That was a true value, too. It was off an appraisal that I ordered on it.....NOT the sherrif's office supposed appraised value. Only 3 years old. In the country on 5 acres. It was an REO. He got that puppy for 88,500. I **** you not. I work MOSTLY on the commercial side of things ( the big cats) but I also deal with a ton of investors. Each one has his own way of doing things...but in the end, it all comes down to the same thing. The winner is gonna be the one that finds the worm first and has his financing in order.
Most people wait till the auction is over and the home then becomes an REO. (real estate owned) This simply means the bank bought it back at the auction and listed it with a real estate agent for sale. For these homes, just call your real estate agent and tell her to give you a listing AND keep you notified of all new listings. Keep in mind that the bank sends a representative to each auction to protect their interests. They will try and run your bid up sometimes. :wink: If you don't bite..no biggie. They come prepared to buy it back, anyhow. Since most banks books are overflowing with foreclosures ....you can get some great deals AFTER the initial auction. I have seen some sweet contracts fly through my bank.
Don't forget about Hud Homes For Sale.
Just keep in mind on Hud properties, the bidding will initially open up for "primary residence borrowers." After so many days if no sale has been made on the property.....bidding will open up to investors.
Kicky......there's a ton of information out there. Don't pay any of those sites. Do your own homework for free. If you need any help as you go along....shoot me a pm and I will help ya all I can.
Oh yeah..... one more thing. I also keep track of what's sold at a foreclosure in my county by going to my county auditors website and searching on the first day of each month, as it allows you to search by sales. When I bring up the listing ....I then seek out the names of banks , fannie mae, hud, VA, etc., ....if you do this, you will have the listings before the real estate agents have them, even. Cuz you are getting YOUR listing shortly after the new deed is recorded.