• How to Find Foreclosure Homes for Sale

    Brandon Cornett

    By Brandon Cornett
    © 2011 All rights reserved

    Summary: This article explains the different ways you can find foreclosed homes for sale in your area. We've also provided links to some of the most popular listing services. These services can help you find foreclosure properties that are currently on the market.

    Ready to get started? Use the link below find properties in your area:
    Find Foreclosures with RealtyTrac.

    There are plenty of foreclosed homes on the market right now. In fact, we have seen record-breaking inventories over the last few years. The housing crisis and recession are responsible for this. It's unfortunate that so many people have lost their homes. But it's also an excellent opportunity for buyers. These properties are often priced below their true market values, so you can save money when purchasing them. But first, you need to locate them.

    3 Ways to Find Foreclosed Homes

    You can't capitalize on this segment of the housing market until you have a way to find foreclosed homes. There are several ways to go about it. You can find foreclosure properties through your county offices, or by using a foreclosure-tracking service such as RealtyTrac. You could also use a "list broker" to obtain this kind of data, but I recommend avoiding this option. I'll explain why as we move through the lesson.

    Here are the three options we will focus on:

    1. County offices
    2. Foreclosure-tracking services
    3. List providers

    There are pros and cons to each of these options. For instance, the online foreclosure-tracking services (#2) usually have the most current data, but you'll have to pay for it. Your county officials will give you this information for free, but it's not always easy to get -- not as easy as the web-based services, anyway. So it's a tradeoff. As we progress through this article, you'll soon realize that option #2 is usually the best way to find foreclosed homes in your market.

    1. Find Listings Through Your County Office

    When a bank forecloses on a home, it gets filed with the county where the property is located. So, in theory, you can find foreclosed homes in your area by visiting the appropriate county office. You might be able to find the information on their official website, as well.

    The particular office that handles foreclosures will vary from one county to the next. In most cases, it's the public trustee's office that handles this information. Sometimes it's the tax assessor's office. But it might be a different department in your county. You should be able to find the right office with a Google search. 

    Here's the thing about going through the county. It can be a clumsy, time-consuming process. Some counties have online search tools where you can find foreclosure homes for sale. Some of these tools are fairly sophisticated and easy to use. Alas, in my experience, these are the exceptions to the rule. Most county websites leave something to be desired. They are hard to navigate. They're not updated very often. Or they simply lack the information you need to find foreclosed properties in the area.

    If you're lucky, you live in a county that has developed an online foreclosure database. This is the ideal scenario, because you can search the database for free. In the absence of such a database, you'll have to use a paid listing service to find foreclosed homes (see next option).

    2. Find Listings With a Foreclosure Tracking Service

    Depending on where you live, you might find it difficult to get listing data in a timely manner from your county office. They are government employees, after all. They have no incentive to provide fresh data. If you're serious about buying a foreclosure property, you should sign up for a tracking service. These services do a lot of the legwork for you, gathering data on distressed homes. You can log into the website and instantly find foreclosure listings in your area. You can search by location, by price range, or by foreclosure status (auction, bank-owned, short sale, etc.).

    I recommend using RealtyTrac for this purpose.
    They are widely regarded as the most comprehensive and sophisticated data provider. That's why they are always quoted in the news. See special offer below:
    Get a 7-Day FREE trial with RealtyTrac! Find a foreclosed property now!

    But they're not the only company that offers this kind of service. You might want to look into Realtystore.com, Auction.com, and Foreclosure.com while you're at it.

    Remember, you're not the only one shopping for a bargain home. There are plenty of other buyers in your market trying to find foreclosed homes for sale. And the person with the freshest data has a big head start on buying the property. In other words, stale data is nearly worthless. That's why I strongly recommend the online approach (as opposed to driving down to your county office every week).

    If you're serious about buying a foreclosed home, you need to sign up for one of the online tracking services. It's that simple. These services allow you to monitor most of the foreclosure activity in your area. When homeowners have a notice of default filed against them, you'll know about it. When banks foreclose on properties, you'll know about it. And when these properties are put up for auction, you'll be notified as well. When they don't sell at auction and come back onto the market as bank-owned homes, you'll know about it. You get the picture.

    You can get these notifications by email, or by logging in to your account online. This is clearly the most efficient way to find foreclosed homes.

    You could save a lot of money by purchasing a foreclosure. You know this, and so do all of the other home buyers and investors in your area. That's why it's so important to stay on top of your local real estate market. You need to find out about foreclosures as soon as they come onto the market. The web-based services can help you accomplish this goal.

    3. Find Properties Through a List Broker / Seller

    I don't have much to say about this option. In my opinion, it's inferior to option #2 above. But you'll probably encounter a "list broker" at some point, so I want you to be familiar with the business model.

    The concept is simple. A company (or even a single person) compiles information about distressed properties in a particular city or county. Then they offer to sell the list to buyers and investors for a fee. In most cases, they're just getting their information from the county and passing it along to buyers. So there is an element of convenience to this option. But, in my experience, there's also an element of sloppiness and staleness. There are better ways to find foreclosure listings in your area.

    These "small players" are essentially trying to duplicate the business model of larger companies like RealtyTrac. But they don't have the resources to pull it off successfully. They don't have the time, money, talent and technology needed to maintain an accurate list with fresh data.

    Here's what I'm saying about the small-time list brokers: Buyer beware! You're better off working with a reputable company that has the resources to do it right.

    That's why I recommend option #2 as the best way to find foreclosed homes for sale. The foreclosure-tracking services have perfected the business model. So why would you use anyone else? It's all about working smarter, not harder.

    Learn the Local Laws and Procedures

    The process of foreclosing on a home differs slightly from one state to the next. It's not the federal government that dictates how the process works. The laws come from the state level. Sometimes, you'll even see procedural variations from one county to the next, within the same state.

    So it's not enough to find a foreclosed home. You must also be familiar with the process of buying one. Foreclosure procedures can be fairly complex, especially in the more litigious states such as California. So before you plunge into these waters, you should do a little homework first. Start with your state's laws on this subject. Research the basic foreclosure process.

    You don't necessarily have to become a legal expert on the subject. But you should at least understand the basics of how the process works -- particularly the steps leading up to (and including) the sale of the property. Once you've familiarized yourself with your state's foreclosure laws, you should research the process in your city or county as well. In some cases, the legal proceedings in one county will be different from other counties in the same state.