The 2 Ways You Can Buy Foreclosed Properties
There seems to be some confusion about how you actually buy a foreclosure. There are just two ways: On the courthouse steps or from a Realtor. That’s it.
1. On the courthouse steps. When the bank gives the sale date it is public record. You can get this information from a realtor, the title company or the courthouse. A trustee for the bank holds the sale in the lobby of the courthouse. The bank sets the minimum bid price and you can buy it for $1 more if no one else is bidding against you. It used to be that the minumum price was the amount owed against the house. Not so anymore. The minimum prices can be really low compared to value.
If you are the winning bid, you have to pay cash.
There are some obvious pitfalls to this method. You do not get to inspect the house. You have to have cash. There are no warranties or recourse. The owners could still be living there, in which case, you have to get them out and hope they don’t strip or trash the house.
2. Buy from a Realtor. After the bank takes the house back, they process it and then list it with a Realtor. Generally, the price starts at market value and then is systematically reduced until an offer is generated. It’s like a regular sale and you will make the offer subject to an inspection and financing.
There is no secret list of foreclosed properties. If the bank has taken the home back, it will be listed with a Realtor. You can’t buy them directly from the bank after they have been foreclosed, unless you are a huge investor buying “blocks” of homes.
It’s possible to get a great deal on a foreclosed home, but you need to know what you are doing. If you’d like some help, contact me.