How to Find Cheap Foreclosures

Foreclosures are properties that have reverted back to the mortgage company after the previous owner defaulted on the loan. Finding cheap foreclosures is directly related to the current market conditions in the area and a comparable market analysis (CMA) of the foreclosed property. To perform a CMA. you must find property that has recently sold and is comparable in size, location and any other possible aspect to the foreclosed property. This helps you determine if the foreclosed property is offered at a cheap price.

Difficulty:

Moderately Easy

Instructions

Things You'll Need

• Newspaper
• Real estate agent
• Copy of lien

1. View the list of foreclosures in your local newspaper. Learn the owner's name and address of the property.

2. Call the local banks in your town. Ask for the foreclosure department. Request a list of the current foreclosures owned by the bank. Also, ask if they have a website that shows the property listings.

3. Contact a local real estate agent. Real estate agents have access to the Multiple Listing Service (MLS) that has information on cheap foreclosures listed by them or other agents. Ask the agent to give you the address of the property or print out a copy of the listing.

4. Find the location of the cheap foreclosed property. Visit the property to access any damages that need repairing or expenses required. Since the update and repairs are your responsibility, the cost must be added into the price of the property.

5. Visit the courthouse in the town where the foreclosed property is located. Request a copy of the previous mortgage lien filed on the home. This provides you with information about the foreclosed property, such as the previous appraisal amount, current owner and previous loan amount. This allows you to compare the information with the current asking price of the foreclosed property.

6. Ask for a list of foreclosure auctions from the courthouse. Some cheap foreclosures are bought at a real estate auction, and having a list allows you to view the property and obtain the information before the day of the auction if you are interested.

7. Visit the Housing and Urban Development (HUD) website to view a list of foreclosures (see References). They handle government backed loans that have defaulted on and become foreclosures.

Tips & Warnings

• Avoid foreclosed property that requires extensive repairs.

• Be prepared to pay for a new appraisal on the property.

References

• Money Central: The Safest Ways to buy Foreclosures
• HUD: HUD Homes
• Foreclosure.com: House Auctions