Buying a home involved in foreclosure can have its advantages, including the opportunity to buy a home at below-value market price at public sale. However, before you can benefit from this kind of deal, the first step is finding out if any houses in your area will be sold at foreclosure auction.
Check with the county recorder or tax assessor’s office. The clerk of court should be able to tell you if there is a foreclosure action on record for the owner(s) of the property you are interested in purchasing.
Talk to a local real estate agent. Because many homes in foreclosure are financed by the U.S. Department of Housing and Urban Developed or the HUD through the Federal Housing Administration, an agent certified in these areas can help you find out if a particular property is in foreclosure. He or she may be able to provide a listing of other properties in foreclosure as well. Start by contacting your local board of Realtors.
Find bank foreclosure homes by establishing communication with local lenders and Realtors. These are the people who manage and market foreclosures that are up for sale. Talk first with your own lender for leads on upcoming foreclosure sales. Or, contact a real estate broker in the area to ask for a referral to a REO agent who can answer questions on whether a property has been foreclosed. (An REO is a real estate-owned property.)
Take advantage of the many foreclosure database services now available online. Most will charge a fee, so make certain that you will be able to access the information you need. Some of these online services offer search tools that make it easy to search for foreclosure properties directly. Many national lenders also maintain websites listing bank-owned properties.
Drive through neighborhoods where you are interested in purchasing a home to look for Realtor signs that say "foreclosure" or "bank-owned."
Tips & Warnings
- Newspaper ads are another good resource for locating foreclosure properties. All states are required by law to post a public notice of auction in a newspaper.
- Other government agencies to contact include Fannie Mae and the Small Business Association.
- Contact the Department of Treasury for information about homes seized by the Internal Revenue Service.
- Foreclosure laws vary by state. If you plan to buy a foreclosure property, you still need to apply for loan preapproval. It's always a good idea to find out about what may be involved in the loan process beforehand.
- Photo Credit old nieghbors image by Michael Shake from Fotolia.com
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