To answer your questions, I will wear my three different hats of experience. Having started 17 years ago as a foreclosure investor, I recommend starting by knocking on the door. Sounds crazy, but 70% of my deals came from just doing this. Leave your contact information that you are an interested home buyer--whether they are there or not. You have the address, so send them a quick letter as well. If they have moved, you may get the owners new address when the letter is returned to you. the neighbors can also be a wealth of information. Be sure to check out information from the assessors office (http://arcc.co.san-diego.ca.us/ ) or your title company. I, too, am a big fan of ForeclosureRadar.com. When you have the owner's name, Google it, use ZabaSearch.com, or find them on different social networks like Facebook, Linked In or Twitter. If you found this property online from one of the bulk foreclosure listing websites, keep in mind that they are often outdated and listings are often left on line as a source of generating buyer leads. And lastly, if you have the time, it's worth it to go to a foreclosure auction in your county...at least once. If this property ends up being sold at auction, you can attend and see if an investor buys it or it goes back to the lender. Contact the winning bidder right away because you can get a great deal if they don't need to go through the time, hassle and expense of marketing it if you want to buy it right away.
That brings me to wearing my REALTOR hat. Finding current, active and even expired foreclosure and pre-foreclosure homes are best done through the services of a dedicated, informed Realtor who is educated in the niche you are interested in. If you are interested in just bank owned REOs/foreclosures, find an agent who truly understands the process...not just one that has a list of them. (We all have the lists, by the way.) If you are looking for bargains in short sales, it is paramount to have a short sale specialist who is a strong negotiator skilled enough to handle all aspects of the short sale transaction. If you find a good one, there is no need it should take 6 months to close!! Just so you know, short sales can often offer greater bargains than foreclosures owned by the bank. Many REALTORS are great neighborhood specialists that can help you as well, but if you are looking for distressed properties make sure you have someone certified for that as well...if you want to save time and money. If short sales are negotiated properly, you can get the seller (lender) to pay your closing costs. Remember, the best agents can save you LOTS of time if they do a thorough consultation with you initially to find out exactly what you are looking for...let them do the research for you.
My third hat is my lender hat, as I have owned mortgage companies across the country. Financing is one of the top reasons deals fall through today. Be sure you have your financing complete before you begin your search in earnest. Most REOs will require this and it helps strengthen your offer with any seller, as well. Depending on they type of financing you are approved for you may be limited to only homes, as not everyone is willing to accept VA or FHA financing on their homes. The new Fannie guidelines offer amazing financing with just average credit scores. A skilled mortgage professional can also help you structure some very creative financing by thinking outside the box...even as lending guidelines have changed. They can tell you which areas you can buy in and still get 100% financing. Be as selective with your mortgage professional as you are with your real estate agent. Your lender may also be able to get you the contact information you need on the foreclosure home you are interested in.
So, Hx...all my hats are off to you for buying a smart buyer in a market filled with tremendous opportunities. Good luck in your search. If I can be of further assistance, let me know...I am easy to reach.
Koni Scavella, PhD, REALTOR
Certified Short Sale & Bank Owned Specialist
The HomeFetchers Team - "...bringing real estate excellence to you"
Office: 877-610-1717 ext 111
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Unless you have lots of experience with buying foreclosures I really would recommend working with a competent REALTORÂ®. There are lots of issues associated with REO properties that are not common in conventional sales. REOs are exempt from many of the disclosure requirements that conventional sellers must adhere too. There is a mountain of paperwork involved in any real estate transaction and this is not the time to miss anything.
Finally, as the buyer, your agent's commission will be paid by the seller so even more reason to choose a competent REALTOR.
For more information on how to choose a REALTORÂ® and how to buy REOs and short sales, check out the website below.
Hope this helps.
You've gotten a fair amount of advice to just go ask your local real estate agent. However, please be advised that even then, there may be some complications. For example, if the property is already bank owned, the tax records should show the "bank" that owns the property. And if the agent has any problems here, they will call their local Title rep. and ask the Title company to look it up for them.
Now we get to the "fun" part. That is when we call the bank that supposedly owns the property and they have absolutely no idea that they actually own it. In fact, they may emphatically claim they do not own the property. Then you can spend weeks chasing down the different departments trying to get them to admit they own it so you can make an offer. Ask me how I know!
As an aside, if the property is listed, the listing agent will get double the commission, so the main focus will be on that, not trying to get you a better price. If you have your own agent, you'll have someone who knows how to negotiate on a buyer's behalf to get you the best price, and a buyer's agent won't charge you anything to look out for your best interests - that's our job.
If the property is not listed, the owner may owe more than the property is worth, which is a common scenario in this market. If there's equity in the home, it could be a good opportunity if you're looking for a new home for yourself to live in. If you're an investor, be careful, there are laws when buying equity property in foreclosure.
when you are ready, i.e. have your pre-approval letter, call a favored re agent to hrlp you through the process
Your REALTOR will be able to provide very valuable information (Is the house on the market or are you seeing a notice of default?, is it a short sale?, is it active or contingent?, is it bank owned?, what stage of foreclosure it is in? Are they already offers? What are the risks involved with the particular property? etc...) A bit of research will save you a lot of time. Remember that if the home is on the market, the agent listing the foreclosure home is representing either the bank or the current owner.
Marcie Sands, REALTOR
Simply The Best Real Estate Co., Inc.
I list and sell bank owned properties all over San Diego County and would be happy to help you locate that informatioin. Feel free to give me a call direct.
Safe Harbor Money Management
CA DRE License #01863531