How to Find Foreclosures & Short Sales
Whether you are looking for an investment property or a new house to live in, buying a foreclosure or a short sale, in which the bank agrees to take an offer for less than it is owed, can be a great approach. It is not hard to find foreclosures and short sales. Once you know some places to look, you will be ready to get started.
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Instructions
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Contact a real estate agent. Once a property has been through the foreclosure process, the mortgage company assigns it to a real estate agent to list and sell. All agents have access to the information about these houses through a real estate listing service provided to agents and can locate the properties for you as soon as they become available.
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Ask your real estate agent about houses that might be possible short sales. The listing agent (the agent for the home seller) will make a notation to other agents that the house has moved into pre-foreclosure, meaning it is a potential short sale; ask your agent to provide you with a list of properties for which short sales might be an option.
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Look in the newspaper. Many homeowners who are trying to sell their own home will mention in the ad that they must sell. If they are in pre-foreclosure, you can ask the homeowners for permission to discuss the situation with their bank and try to negotiate a short sale on the house.
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Attend courthouse auctions. Houses that go through foreclosure must be advertised in the legal section of the newspaper and are auctioned on the steps of the courthouse. You must supply documentation that you have funds readily available to pay for the house within a very short period of time, but the savings can be tremendous since you are only paying the amount the bank is owed.
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Tips & Warnings
Check with your lender before you start looking for properties to buy. Due to mortgage fraud in the industry, many mortgage companies either no longer lend money on investment properties or require large down payments when they do.
When attending a courthouse auction, it is the responsibility of the potential buyer to investigate the property for liens, taxes owed and title issues. If a problem occurs with a property after you have purchased it, you will have no recourse for the money you have lost.
Beware of Internet sites that sell lists of foreclosures. Many provide information that you can get for free through your real estate agent.
