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How to find Foreclosures like a Real Estate Investor

Investing in foreclosures can be quite profitable if you have the required experience to go about it successfully. A home foreclosure usually occurs when a lender tries to sell a home to recover money borrowed that the home owner could not pay. It is quite common in the mortgage market when the home owner is no longer is able to keep up with required home payments. In such circumstances, the home undergoes a foreclosure and the lender would try to sell the home to recover investments.

A lot of real estate agents and investors take advantage of foreclosures to get relatively cheap deals on homes and properties. This is because they know how to hunt and find them. Here are just a few effective tips that can help you find foreclosed homes like a professional real estate investor.

Pre-foreclosures

Pre-foreclosures occur on non-mortgage loans that basically allow lenders to repossess the property used as collateral without having to first file lawsuits. With a mortgage, the lender is required to file a lawsuit and this involves time and public record entries, which makes it easier for people to locate home foreclosure. For some deed of trust (also referred to as TDs or deeds), in some states, a clause known as the power of sale allows the lender to try to repossess without first filing a lawsuit and this makes it harder to locate such foreclosures. Some states however mandate that all lenders file a lawsuit before trying to repossess. This makes foreclosed homes from mortgages generally easier to find.

If you have your sights on a pre-closure, you can check with the county recorder of deed to know the type of debt used to finance the payment of the property. If it is a mortgage, it would have to go through some required process, which gives you time to act. If the debt was a deed of trust, you will need to check applicable state laws to learn about the legal process for foreclosing the property.

There are basically three ways of locating pre-foreclosed properties.

First, you can contact the local court in the county to ask if Notices of Default are required to be recorded with the court. If the answer is yes, you should then look for a way to search among new court fillings of NODs.

You can also check for available county recorder data online. Go to Netronline.com and click on Property Data Online. Choose the state and county and you should be able to access any available information online. Conduct searches for recent NODs (Notices of Default). Searching online is simple and free and you could also get information about any applicable judgements or liens against the property. Take note that not all county data recorders have the necessarily data online and so you may have to use the third option.

Option three involves checking the legal section of your local newspaper. There is usually a listing of properties that are to be publicly auctioned. They are usually termed as “trustee sale” or “sheriff sale” or something related. You can then take down any information you need such as owners names, tax identification and date and address of the auction. Take the information and check at the office of the County Recorder to get information on the NOD of the property. Check to see who recorded the default and that is the company you can work with.

Real Estate Agents

Many real estate agents are quite familiar with foreclosing properties in their area. Many of them also work with the lenders in trying to dispose off the property. If you work with an agent you can ask them for a listing of foreclosing homes and REOs. It is likely that an agent that has one foreclosure would probably have access to several more.

Real Estate Signs

Sometimes you may come across a sign post around a neighborhood that says something like Bank-Owned, Foreclosure or Bank Repo. These are indications of a foreclosing home. Get the contact of the agent on the sign and you ask them to alert you of foreclosures that may be coming into the market. Real estate agents usually have advance knowledge of listings before they are even listed.

Bank Web sites

Some major banks such as the Bank of America, Countrywide and Chase Mortgage maintain an updated list of foreclosed homes. You can check these sites periodically to see if something of interest pops up.

Asset Management Firms

Many lenders use asset management companies to handle the disposal of foreclosed homes. Some examples include Premiere Asset Services used by Wells Fargo, Keystone Asset Management, and HomeEq Servicing used by several subprime mortgage firms. These asset management firms post listings of foreclosed homes on their websites.

Government Agencies

Government agencies such as Fannie Mae and HUD also offer listings of home foreclosure that they handle on their websites. The Department of Treasury also makes listings of homes that have been seized by the IRS that are to be auctioned. Some of these agencies would not deal with you directly, but would require that you make an offer via a real estate broker. Be sure to get relevant information on how to proceed.

Auction Houses

Auction companies auction out homes on a regular basis, sometimes selling as many as 100 homes in one day. However, many people argue that the bidding frenzy usually makes buyers overpay for the property. However auction houses are worth mentioning as a source of finding foreclosing homes as one may still find a gem there. Be sure not to be pushed into overpaying above the prevailing market worth for the property.

Internet Based Foreclosure Companies

There are several online based home foreclosure companies that do all the finding and research for a fee. When you register with such companies they would charge you a fee and update you regularly when foreclosure properties that you would be interested in come up. The above sources mentioned are great sources to help you find foreclosing properties on your own, but if you want to be saved the trouble you could pay for the service.

Take Note

Not every home foreclosure is a great buy. Some unwary investors have gotten unexpected loses because they lacked the needed experience to know how best to go about it. It is thus advisable to seek professional advice and help before finalizing any deal.

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