How to Find Foreclosures and Government-Seized Homes
Guidance and home listings to help you find foreclosures
Finding foreclosures is fairly easy in depressed markets, but it's also simple to find foreclosures in strong real estate markets. The difference between the two markets is you will find a greater number of foreclosures in falling real estate markets.
Many pre-foreclosure homes that were once offered as short sales end up as foreclosures, which are eventually deeded to the bank. The reason why purchasers may refuse to buy a short sale home could be any of the following:
- Sellers stripped the foreclosure home's assets and/or vandalized the property.
- The bank refused to accept less than its present mortgage balance.
- Buyers passed by the short sale in favor of a hassle-free purchase.
- The location of the home and/or neighborhood was undesirable.
- The listing was overpriced at its mortgaged amount.
- The seller did not qualify for a short sale.
Finding and Buying Foreclosures
Not every foreclosure is a great bargain, and some can morph into unexpected nightmares. There are drawbacks to buying foreclosures. Some foreclosed homes are diamonds waiting to be polished. Inexperienced foreclosure buyers might want to hire a real estate agent for guidance and assistance. There are several ways to find foreclosures, described below, whether you work with a real estate agent or not.
Real Estate Agents
The top-producing agent in Sacramento specializes in listing foreclosures. We know who he is because we know how to enter the search values in the Multiple Listing Service (MLS) to bring up all the foreclosures. Consumers do not get direct access to the MLS like agents do.
You can ask your buyer's agent to search for REOs (real estate owned by lenders), and when you see a listing agent's name over and over, pull up that agent's profile and look at his or her listings. You will probably find a ton of foreclosures at your fingertips.
Real Estate Signs
Driving through distressed neighborhoods where you want to buy is another great way to find foreclosures. The signs might read:
- Bank Repo
Call the agent whose name is on the sign and inquire about other foreclosure listings that may be coming on the market. Agents who specialize in foreclosures sometimes wait weeks while bank management approves the list price, so you can get a jump on other buyers by asking about new foreclosures not yet listed.
If you are working with a buyer's agent, you can ask your agent to obtain this information for you.
Major Bank Websites
Many banks maintain online lists of foreclosed properties. Not every bank will sell to individual buyers. A more common practice among the large lenders to dispose of REOs is to bundle them into a package and sell that package at a discount to investors.
Here are a few national lenders who maintain websites of bank-owned properties:
- Bank of America
- U.S. Bank
- Wells Fargo
Asset Management Companies
Some lenders hire an asset management company to handle foreclosures on the lender's behalf. Wells Fargo uses Premiere Asset Services. Keystone Asset Management is a national agency that deals with defaults.
- HUD — U.S. Department of Housing and Urban Development's foreclosure homes
- Fannie Mae — Foreclosure homes through its HomePath website
- Department of the Treasury — Homes seized by the Internal Revenue Service
- SBA — The Small Business Association list of foreclosure sites and guidance
Auction companies hold huge auctions, sometimes selling as many as 100 homes or more in a single day. While many experts agree that auction companies often get higher prices due to the auction frenzy created among its bidders, sometimes you can find a gem in their inventory.
- Real Estate Disposition Corporation
- J. P. King
- United Country Auction Services
- Williams & Willaims
Internet Foreclosure Companies
Web-based foreclosure companies charge a fee for providing you with a list of foreclosure properties. The reason that it takes time, trouble and expertise to locate and assemble accurate national foreclosure lists. You may find it's worth it to let these companies search for you.
Courthouse Steps Auctions
You might also want to try your hand at bidding for a foreclosure on the courthouse steps. Beware that professionals often rule these premises. The downside is you generally are required to pay cash and buy the property sight unseen, and you could be assuming liens or judgments and be forced to pay delinquent property taxes.
Also worth considering is the equity of redemption.