Tuesday Tips: Finding a Foreclosed Home

It seems like the words "housing market" and "foreclosures" are now permanently joined at the hip. A lot has been written about the risks and rewards of buying a foreclosed home. Have you ever bought one? As I search for my own home to buy, I've wondered where to find them aside from wandering around neighborhoods looking for those foreclosure signs. I talked to a few Realtors and the National Association of Realtors for some help in finding these homes. Lots of homework needs to be done before plopping down money for a foreclosure, so here are a few tips on where to find them:

Tip #1: Know the lingo. We've learned lots of new real estate terms with this whole foreclosure crisis. Here's a small picture of some of the words you'll hear: A "REO property" is the same thing as a foreclosed property. It stands for Real Estate Owned by the lender. Owners who can't pay their mortgage payments can also sell their homes in a "short sale," which is an agreement with the lender to sell the house for less than what is owed. It could help the owner avoid having a foreclosure on their credit report. If the bank has taken control of the house, they'll sell it at "auction."

Tip #2: One of the first things to do if you're interested in shopping for a foreclosed home is to figure out what neighborhoods you like and then contact a Realtor. They should know about more properties than are publicly listed on the Internet, says a National Association of Realtors spokesman.

Tip #3: The association also recommends hitting RealtyTrac.com, a Web site that lists all kinds of homes in the foreclosure process from pre-foreclosure to auctions of bank-owned properties. You can sign up for a 7-day free trial and then it's $49.95 a month.

Tip #4: Realtors I spoke to also recommend the Real Estate Disposition Corporation's Web site, which has a calendar of bank auctions of all kinds of homes from single family detached to condo units. For example, there's an auction on Oct. 22 in Washington to sell several hundred local foreclosed homes. You can search through the listings that will be at that auction and narrow it down to different cities or counties within the region.

Tip #5: Realtors also like Foreclosedhomes.com, which lists foreclosed homes as well as For Sale By Owner and For Sale By Realtor homes. The site also offers a free 7-day trial period and then charges about $40 a month to search for homes.

Are you thinking of buying a foreclosed home? Where have you been looking? What are the best sources for finding foreclosures?

By Tania Anderson |  October 21, 2008; 12:00 AM ET Tuesday Tips
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Please email us to report offensive comments.

In these tough economic times, why is there not a "FREE" website to find homes that are being foreclosed or auctioned?

Posted by: ed | October 22, 2008 9:38 AM

Ed - There are free websites that allow you to search foreclosure homes. Typically, they are run by the banks themselves. These days, most banks allow you to search their REO properties and do so for free.

You can find a directory of these banks and other great resources at our Real Estate Social Networking Community, BiggerPockets - http://www.biggerpockets.com

As for the article, I think it is dangerous, Tania, that you give consumers half an education on foreclosures. The responsible thing to do would be to let people know what the upsides and downsides are of each of the various foreclosure types are. Wouldn't it be prudent to let people know that when they buy a foreclosure at auction, the liens ARE NOT removed? Promoting this without explaining the consequences can lead to even more people being harmed. It is good that you're trying to help people know how to shop for foreclosures, but I hope in the future you supplement that needed additional information on risks involved.

Joshua Dorkin

Posted by: Joshua Dorkin @ BiggerPockets | October 22, 2008 10:18 AM

Please, for the love of all that is holy, STOP CAPITALIZING "realtor". It isn't a proper noun. It's never been a proper noun. Do we capitalize "doctor", "lawyer", "judge", "nurse", etc.? No? Then why would we reward the National Association of REALTORS(tm), a group that consistently gets it wrong and played a significant role in the recent debacle, with more respect than we provide to more productive and educated professions?

Unless the capitalization is a mark of shame. Then we should start capitalizing "Bankers", "Mortgage Brokers", "Stock Brokers", etc.

Posted by: burntnorton | October 24, 2008 6:37 AM

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