| It seems everyone wants to know how to get started | | | | when I have had a chance to inspect the property. |
| buying foreclosures. Whether you are just trying to get | | | | This has been a result of trying to buy the house |
| a good deal to buy a house or want to invest in rental | | | | through a pre foreclosure sale. One such house I |
| property, the foreclosure crisis has created a unique | | | | bought had 3 liens against it. The third lien holder did not |
| opportunity for those in the know. | | | | want to negotiate a short sale even though the first |
| Is buying foreclosures too risky? Should you bid at a | | | | two were foreclosing on the property. In the end, only |
| foreclosure auction? Will you get a really good deal or | | | | the first lien holder was at the auction and willing to bid. |
| a nightmare? | | | | I was able to get the property for about half its value. |
| There are three opportunities for you to buy properties | | | | Buying bank owned real estate after the auction |
| in the foreclosure process: | | | | eliminates the uncertainty of buying an un-inspected |
| | | | property. The downside is that you are bidding against |
| 1. A pre foreclosure sale occurs before the | | | | a larger pool of buyers. It can be more challenging to |
| foreclosure auction | | | | find foreclosure leads. The property may or may not |
| 2. Purchase of the property at the foreclosure auction | | | | be listed with a real estate agent. Some houses are |
| 3. Buying bank owned real estate after the auction | | | | not even listed for sale. |
| I will be discussing the second and third options in this | | | | There are several ways to find foreclosure leads. You |
| article. | | | | can search the web for websites that promise a free |
| Purchase of a house at a foreclosure auction is usually | | | | trial, but you generally will end up paying out some |
| a risky proposition. You generally do not have an | | | | money to use these sites. |
| opportunity to inspect the property before you bid, you | | | | Another way is to search public records. Keeping |
| must bring a large deposit (10-20% of the winning bid | | | | track of houses that go up for auction and then after |
| price) and have funds to close within 30 days after the | | | | the auction try to find the names of the owners. |
| auction. In addition, you sometimes find yourself bidding | | | | A third way to find foreclosures is to drive by houses |
| against several people and pay more for the property | | | | and look for unkempt yards, discarded phone books |
| than it is worth or you can afford. I find that it is usually | | | | piled up by the house or notices on doors or windows. |
| other investors that are bidding at these auctions and | | | | I like to bike neighborhoods since I can go slowly and |
| they have generally done some due diligence, so if you | | | | even look into windows if I see a promising property. |
| are uninformed, you could get burned. | | | | Then I search public records for the owners. |
| One part of due diligence you can do is to inspect the | | | | Finally, you can try to find real estate agents that |
| records at your local Courthouse that indicate what | | | | specialize in selling bank owned real estate. Often |
| lien-holders have placed liens on the property. You | | | | referred to as REO (real estate owned) properties, |
| may find that the IRS has a lien on the property (the | | | | banks often list the foreclosures through certain |
| most senior lien) or that liens against people with similar | | | | Realtors. |
| names to the homeowner have been placed on the | | | | Want to know more about bank owned real estate, |
| property. | | | | short sales and pre foreclosure sales? |
| I've only bid on properties at a foreclosure auction | | | | |