Buying Pre-Foreclosure Properties

Posted by RealEstateBargains.biz

May 14, 2008

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Finding Properties

One of the best ways to easily find good pre-foreclosure properties is to join a foreclosure listing service online.

There are free services and paid services. The paid services are usually updated every day and are a better tool to use.

Once you join a good paid foreclosure service, you should keep track of the properties you like either in a spreadsheet or a text document.

Once you’ve narrowed it down to 10 - 20 properties, you should do a drive by. When doing this, you should check out the overall condition of the neighborhood.

Try to talk to the owner or any neighbors. You can usually get a wealth of information just by listening intently.

Checking Pre-Foreclosure Status

When a property enters pre-foreclosure, the owner can cancel foreclosure status by paying off the debt within 2 - 3 months. Make sure that the foreclosure status is still in effect before proceeding. This can be done by calling the attorney or trustee who is handling the foreclosure.

Get as much information about the market value of the property, how much is owed and if there are any liens. You should be able to get this info at your local courthouse.

Contacting The Owner

Contact the owner and tell them you are interested in their property. Make sure you have all your affairs in order, meaning that you are fully prepared to buy the property.

If the home is listed with an agent, then contact the agent. At this point, both the agent and the owner have to sell before the 2 -3 month time limit, so there is a lot of room for price negotiation.

Usually, the home will not be listed and you can deal directly with the owner. Send the owner a letter stating your interest in their property and that you are willing to negotiate a good deal for both parties.

If that fails, then try to contact the owner by phone or in person. The response you get might not be what you hoped for, but try to initiate a positive conversation if you can. The owner might be angry about having to sell their home, so be prepared for some rudeness.
If this does not work, then you might get a chance to purchase the home at auction. You can get the date and location of the auction by contacting the attorney or trustee who is handling the foreclosure.

…coming up: Negotiating a purchase agreement with an owner…