Foreclosure Listings

You have read the books, looked up online resources and studied the market. You have considered your personal strengths and planned your strategy. With the appropriate research behind you, you are ready to enter the world of real estate investing. Foreclosure listings are a great place to start if you are looking for investment opportunities because they have a lot to offer at a smaller price.

Real estate investing can be a rewarding business if you know what you are doing. Many successful investors know that foreclosure listings offer the greatest opportunity for finding good properties at the best price. If you are a first-time buyer, you may be unsure of where to find foreclosure listings, of why they are good investments and of how to buy them. Once you know the basics on foreclosures, you will be ready to start building your investment portfolio.

How It Works

When a homeowner defaults on a home loan, the lender takes possession of the home. This foreclosure process goes through three stages: pre-foreclosure, auction and post-foreclosure.

Pre-foreclosure

During this phase you can contact the homeowners directly about purchasing the house from them. Because the homeowner will be overwhelmed with the idea of a pending foreclosure, he or she will probably be ready to sell the home. Listings for pre-foreclosures can be found in the local newspaper or at the county clerk’s office. Some services that record and compile pre-foreclosure information are available. These listings provide information on the property, loan and timeframe before actual foreclosure.

Auction

The auction represents the actual foreclosure of a home. Listings for homes on auction will be found in the same ways as those during pre-foreclosure. Additional information will include the auction date, time, location and opening bid. An opening bid is the starting price that includes the mortgage balance, interest and all other fees held against the property. Every auction will have different methods of bidding. To have the best chance at getting the house you want, it is important to be familiar with property and with bidding procedures before an auction begins.

Post-foreclosure

It may be easiest to buy a home at this stage in the foreclosure process. When a home reaches this point, it has not been turned over during pre-foreclosure, nor has it sold at an auction. The lending institution now has possession of the property, which does not look good on its bottom line. The bank will be more than ready to discard the property, which is a benefit to you. Most foreclosure listings readily found through the Internet will be in this stage.

Be Careful

Hundreds of companies maintain listings of foreclosed properties. When basing purchasing decisions off of any list, it is important to approach these lists with some skepticism. You want to make sure the information provided is valid and reliable. Take advantage of free trial offers by several companies to decide if your investment goals match with the information they provide. Foreclosure listings can hold the key to a successful business in real estate investing. All it takes is learning how the process works, waiting patiently for the right listing and jumping on an offer when the right property becomes available.

By Karen Perkins

A REALTOR® is a real estate professional who is a member of the National Association of REALTORS®