Foreclosed properties can provide more house for the money, but they also require a different approach than a traditional home purchase. While houses for sale are typically clearly marked by a sign out front and a listing on the MLS system, foreclosures might be far more difficult to detect, even amid the rapid rise in foreclosures in recent years. Once you have found a foreclosed property that interests you, it is important to know who to approach and how to get the ball rolling on your purchase.
Contact a real estate agent who specializes in foreclosed properties. These agents are easy to find through Internet searches and should have long established relationships with banks and lenders who own the properties you want to see. They know what is for sale and why, and when new properties might be available for viewing.
Search an online real estate database or local realtor listings page. Filter through the results of your search and look for terms like REO (Real Estate Owned) that help to identify foreclosures. When you find a house that meets your needs, call the realtor who has it posted and work from there. The agent will serve as a go-between for you and and ensure there is a single point of contact for both the seller and the buyer.
Visit Zillow's home page and type in the address or zip code of the area where you want to shop for homes. A map of the area with tabs marking each home for sale will pop up. Listings of these homes will populate the lower half of the screen and can be accessed by scrolling down. Click on the "More Filters" tab below the widget on the left side of the page. Remove the check marks from every box except the "Foreclosure" box ,then click the "Search" button. The map will return with a list of all the foreclosed homes in your target area. You can then contact the owner directly at the home address and telephone, or you can contact the lender or agent as instructed at the bottom of the listing.
Contact the lender who foreclosed on the home in question if that's the only contact name you can find on the home. Call the lender's real estate sales department and inquire about the property. Most banks are happy to show and sell the home to get it off their hands. But you will likely need a home loan pre-approval from another lender before moving forward with the process. Lenders will only work with serious, qualified buyers, especially when it comes to selling a property that has already been in default.
- If you are trying to purchase a home that is in pre-foreclosure, your approach should be different. Since the foreclosure process has begun but the owner still technically owns the home, the lender or real estate agent is not the proper point of contact. Instead, contact the owner herself and let her know you are interested in buying the property. Just keep in mind that the selling price must match the requirements of the bank according to what is still owed on the home. If your negotiations are unsuccessful and the house moves into full foreclosure, you can take another crack at it through the lender.
Robert Morello has an extensive travel, marketing and business background. He graduated with a Bachelor of Arts from Columbia University in 2002 and has worked in travel as a guide, corporate senior marketing and product manager and travel consultant/expert. Morello is a professional writer and adjunct professor of travel and tourism.