How to buy Foreclosures

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. We 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. We recommend that you leave all those other criteria at “no minimum” to “no maximum” when you first search to get the best results. We 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. Click here for more information on the property details page.

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.

You can apply for financing with RealtyTrac’s financing partner. The application is free. Subscribers can click on the Get Financing tab on any member page after you log in or click on any “Get Financing” link on the Search Results or Property Details pages. You will be able

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.

You can contact an agent using the RealtyTrac Agent Network. There is no cost to contact an agent, although you should ask the

Contact Owner

Depending on the property status, the seller will be the owner in default, the trustee or the foreclosing lender. To determine the property status on RealtyTrac, look at the Foreclosure Status gauge on the Property Details page.

Pre-Foreclosure (NOD, LIS): Buying a property in pre-foreclosure involves approaching the borrower/owner and offering to buy the property. The borrower/owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. The buyer has time to research the title and condition of the property and can realize discounts of 20-40 percent below market value.

Auction (NTS, NFS): If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.

Bank Owned (REO): If the lender takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender usually sells the property to recover the unpaid loan amount. The lender typically clears the title for any buyer, but the potential bargain is often less than a pre-foreclosure or auction

Make an Offer

If you have never purchased a foreclosure property before, we recommend that you have a real estate agent help you prepare and make an offer. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network.

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 many states, 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.

courtesy Realty Trac