Could someone else's misfortune benefit your family?
Finding and Buying Foreclosures
Foreclosures: Rent or Buy?
Buying a Foreclosed Home
Finding and Buying Foreclosures
How might I find a list of foreclosures in my area? And, what's the best way to buy them?
When Buying Foreclosures, Start with Local Title Insurance Office
Finding foreclosures and buying them varies greatly from community to community. My husband works in title insurance, and he compiles a list of foreclosures in our community. Checking with local title companies is one option for finding out about them, but be prepared to pay for the information. Your county assessor's office does have the information for free if you can get someone to show you how to search for the information.
In our community, foreclosures sales are auctions, and full price cash in hand is required. The auctioneer verifies that people have full price in had before they are allowed to bid. It's not a percentage and you can't just bring a letter saying you have loan approval. I do know that this varies considerably. Some places allow a percentage down and some accept a loan approval.
Like I said, the best source of information would be your local title insurance office. Just know that a little politeness goes a long way. They often will give you a lot of information if you are polite and considerate, not demanding or entitled.
Move Cautiously When Buying Foreclosures
In every state, a foreclosure is a public record at the county recorder's office. You can go there and for free make a list of properties in foreclosure.
Foreclosure sales are auctions to the highest bidder. They are for cash. They are very risky for the buyer because the buyer has not seen the inside of the house. They are usually trashed.
If you are the high bidder at a foreclosure sale, you then have to evict the former owner. This means you must hire an attorney and go to court to get an eviction order. Depending on where you live, this can be weeks or months and can be very expensive.
This kind of real estate investing is only for knowledgeable investors with a lot of cash.
Before Buying Foreclosures, Get Your Hands on This Book
There are many services that offer to provide you with foreclosure information for your area for a fee. Many of them offer a "free trial period." However, most of them are very difficult to unsubscribe from. Additionally, many of them contain outdated information.
The foreclosure process varies from state to state and that means the ways in which you can find out about foreclosed properties in your area depends upon the state you live in. One book that I found extremely helpful in figuring out all the ins and outs of buying foreclosures was The Complete Idiot's Guide to Buying Foreclosures
. This book is written in very easy to understand language and it gives more information than you could get in six months of web surfing. It's well worth the investment.
Buying Foreclosures After the Auction
To find them without paying a fee, look in the legal section of your hometown paper.
Buy them after the auction. The auction is filled with lenders and people highly-susceptible to "auction fever" that tend to bid the house up higher than the actual worth (in which case you don't want it anyway). If the lender wins the bid, the house in question will be back on the market in about four to six months, and you can deal directly with the lender for a short sale (getting the house for about the principal of the last mortgage). Often, the lender you are dealing with will offer to finance the purchase for you.
Lenders don't want the house. They want the money it brings. Don't be afraid to do some "market value" homework and put your haggling skills to work. Don't forget to seek permission to have inspectors check out your property before signing on the dotted line. A perfectly nice-looking home can harbor all kinds of expensive, unseen problems.
Here are some foreclosure websites that show properties that the banks already own. In regards to how to buy them, each bank has different procedures.
Share your thoughts about this article with the editor: Click Here
More Money-Saving Tips for Your Home
- Should I use a HELOC for home remodeling and repairs?
- Find the best mortgage rates in your area
- Check for a lower homeowners insurance rate
- 3 ways to use a mortgage calculator
- Mortgage calculator: Calculate your payment and more
- Home equity calculator: HELOC vs. line of credit
- How much can additional payments save me on my mortgage?