As LA Lending said in their reply, it is possible to purchase properties for less than what is owed but this is a very complicated proccess on a very short timeline. The average person calling a lendor to offer less than the current ballance will be told this is not possible. Most Real Estate agents do not have the specialized training to know exactly how to submit a short sale. This is why more than 50% of all short sale attemps end in foreclosure. If you have a relationship with an agent who does short sales thay would probably call you anytime they were listing a new one.
If a property owner has over 20% equity in thier property their phone started ringing off the hook the day the lendor filed its first court papers. Major investors recieve daily updates from the courthouse around the state and start thier procces for securing these properties.
There are also some websites that list that information for a price - but it's important to note that all information they are giving you is a matter of public record (so you could, with a little research find it elsewhere) and the contact information they give you is usually for the lawfirm facilitating the foreclosure - not the owners of the property. The lawfirm will not release any additional information to you.
After you have a property in mind:
You can offer to purchase a house while in foreclosure before the sheriff's sale - you would have to submit the purchase agreement to the person in foreclosure, who would in turn present it to their mortgage company. This is the only way I know of that you would have the opportunity to purchase the property for less than the debt owed on the outstanding mortgage. Also, you will help the seller avoid a foreclosure ding on their credit report and possibly allow them to pocket some $$ instead of loosing it all to the lending company.
Otherwise you would have to attend the sale and bid against the mortgage holder (who never goes below the debt owed to their company + 3% for sheriff's comissions).
Hope this information helps!
The Clerk of Court office in Covington is a great resource. Go in and ask for help, they are friendly and helpful. There is a charge for copies. There is Clerk of Court information available online as well.
Many homes that are listed with an agent note that it is a short sale situation in the remarks.
If you would like additional information in the St Tammany area, please feel free to contact me.
The advantage of doing that is you can then get a loan for the home, so you do not have to pay cash, and you only need to pay the amount that the home was purchased for at auction.
Be very cautious...investment properties will now require 25% down, and then the cash money to do repairs....take a look on my website for typical repair costs in the Lousiana/Gulf Coast area.
Also, check your daily newspapers. Such notices (pending foreclosures and auctions) are required to have public notice. Assuming you already receive a daily newspaper, that's FREE.
As far as preforeclosures, if you're interested in short sales, many are listed on the MLS. It's just like a regular sale in most respects, except the lender must approve it. So, log onto your favorite Realtor's website and start looking. If you can do a keyword search, search for "lender approval" or "short sale." That's FREE.
Note: Very few foreclosures are tax foreclosures. (Maybe on late night infomercials, they are. But most real foreclosures are for non-payment of a mortgage.) Also, once a property has been foreclosed upon (your "repos"), then the lender owns it; it's too late to buy "before the mortgage holder gets it."
Now, there are tons of ways to find owners in preforeclosure, or owners who'd consider short sales, before they're on the MLS. But, those aren't FREE.
Hope that helps.