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I receive inquiries daily from people who are looking for sweet deals. Most prospects that contact me about foreclosures have absolutely no clue what the process involves. Not to worry. I am here to help, educate and meet the individual needs of existing and potential clients, whatever those needs may be. Buying a foreclosure consists of 5 main steps: 1] Finding the property, 2] Getting Financing, 3] Contacting a Realtor like me 4] Contacting the Owner (the borrower or the lender) and 5] Making an Offer 1] Find a Property Choose a location
After you log in to RealtyTrac, decide where you want to search for property. RealtyTrac allows you to search by county, city or zip code. I recommend starting with a broader search (like county or city) and narrowing the search later if necessary. Choose a property status
Decide the status of foreclosure for which you want to search. You choose the status under Property Status on the Property Search page.
Select Pre-Foreclosure for Default Notices or Lis Pendens.
Select Auction for Trustee Sales or Foreclosure Sales.
Select Bank Owned for REOs (foreclosures).
See Step 4 in this guide for more about the different property statuses.
Advanced search criteria The Advanced Property Search allows you to enter other search criteria, such as price range and number of bedrooms and bathrooms. I recommend that you leave all those other criteria at “no minimum” to “no maximum” when you first search to get the best results. I also recommend you don’t change the Recording Date Range when you first search.
If you use the Advanced Search, leave the search Sort by “Entered On” and the Basic Property Type as “Residential,” unless you are specifically looking for Commercial property.
Daily e-mail alerts
If you want to receive daily e-mail alerts of new properties posted on RealtyTrac that match your search criteria, follow these instructions.
After you select your search criteria, type a name for the search in the Name This Search box.
Check the "Receive daily e-mail notifications of new listings that match this search" box.
Click the "Save My Search" link.
View and edit your daily alerts on the My RealtyTrac page under Saved Searches.
Property Details
On the Search Results page, click “Get Property Details” to see the detailed information for that property. You can click the “Save to My RealtyTrac” link to save the property to the My RealtyTrac page. For more information on the Property Details page, click NEXT. 2] Get Financing
Obtaining financing not only gives you an estimate of what you can afford, it also enables you to move quickly once you locate a property that interests you. When you approach a borrower/owner or a foreclosing lender about a property, secured financing will demonstrate that you are a serious buyer and are ready to buy quickly.
I can pre-qualify you and issue you a pr-approval letter, which will certainly give you a vantage point over other potential buyers. It lets the owner in default and/or the bank know how serious you are.
3] Contact an Agent
If you're a first-time homebuyer and you've never purchased a home, let alone a foreclosure property, it is beneficial to contact a local real estate agent who can guide you through the process of buying a foreclosure. If you work with an agent, make sure they know your priorities. Ask any potential agents if they have experience with foreclosures. Especially for first-time buyers, a good agent can be a comforting and helpful resource.
I know the Bay Area well. I am familiar with the foreclosure process and have a heart for people, especially those with little or no money. My heart goes out especially for young families. I will be able to guide you through the process or help you get a home quickly when I know what your needs are.
4] Contact Owner: Pre-Foreclosure
When a property is in pre-foreclosure (NOD, LIS), the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. The pre-foreclosure period can last several months, so you may need to be patient when trying to contact the owner in default.
Call the trustee
The first step is to call the trustee listed on the Property Details page to confirm if the property is still in foreclosure. The trustee has the most up-to-date information if the owner has sold or reinstated the property. The trustee cannot answer other questions about the property.
Evaluate the property
If you haven’t done it already, you’ll want to evaluate the property’s value and check for any additional loans or liens encumbering the property so that you can make an informed decision about whether the property is a wise investment. On the Property Details page, click on “Comparable Sales” to view a report that evaluates the home’s market value based on comparable sales in the neighborhood. Click on the “Loan & Lien History” to view a report that lists additional encumbrances on the property.
Contact the owner in default
If the trustee confirms the property is still in foreclosure, and you believe the property could be a wise investment, you should contact the owner in default as soon as possible. The quickest way to make contact with the owner using RealtyTrac is to click on the “Contact Owner” link on any Property Details page to send a postcard to the owner. You can print a postcard and mail it yourself or have RealtyTrac mail a postcard for you. You can choose pre-written wording for the postcard or type your own wording. If you save a property to My RealtyTrac, you will be able to view a record of when you sent a postcard for the property.
If the owner does not respond to a postcard you can try to send another postcard (the owner may have a change of heart as the end of the pre-foreclosure period approaches) or you can wait to see if the property is scheduled for auction and attend the auction.
Other contact options
One option is to call the owner if you can track down the phone number. Another option is to go to the property and try to contact the owner in person, as long as you recognize the ownership rights of the owner. I don’t recommend either of these options if you don’t have previous experience.
5] Make an Offer
If you have never purchased a foreclosure property before, I strongly recommend that you contact me to help you prepare and make an offer.
Evaluate the property
To get an estimate of the potential bargain for any property, you need to find out the estimated market value of the property, how much is owed on the property and if the owner has any other loans or liens encumbering the property. On the Property Details page, RealtyTrac usually provides the estimated market value and the estimated balance of the loan in foreclosure, called either the Balance or Opening Bid.
Click on"Check Loan & Lien History" to view a Legal and Vesting report that lists additional loans or liens on the property. Click on "Check Comparable Sales" to view up to 15 recently sold neighborhood properties and an analysis of property values in that neighborhood.
Add together any outstanding loans and liens and estimated repair costs and subtract that total from the estimated market value of the property. You can plug the numbers into RealtyTrac’s Xamine tool and it will calculate the potential bargain for you. RealtyTrac's Xamine tool can be accessed by clicking "What's Next>Evaluate Property" on any Property Details page.
Make an offer
Based on your research of the potential bargain, you can make an offer. Usually the offer amount is somewhere below the market value but above the total outstanding liens and estimated repair costs. If the property is a pre-foreclosure or bank owned, you could prepare an offer similar to a typical purchase offer, contingent on a full inspection and title search.
Bid at auction
If the property is selling at auction, you will need to make your offer, or bid, at the auction. In California, bidders are required to pay in cash in the form of a cashier’s check at the auction. You probably won’t be able to conduct a full inspection and title search when you buy at an auction, so it’s important to do good research before attending an auction.
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