help locate properties, as well. In addition to my own MLS, I can look through others in the area, which helps to expand your search.
Foreclosures
According to the 2017 NAR® Investment & Vacation Home Buyers Survey, 18% of investors buy foreclosed homes. In order to purchase these properties, investors must go through auctions. If they’re the highest bidder, they have to pay the full amount at that time. They will then get the trustee’s deed once the sale is complete. Foreclosed properties’ prices are determined differently from other properties. Instead of using what the home is worth, the starting bid includes the following:
• How much is still unpaid on the loan • Interest owed from attorney’s fees • Any costs stemming from the foreclosure process
Sometimes, properties don’t even get that starting bid. When this happens, it becomes bank-owned, or Real Estate Owned (REO) property. The loan lender owns the home and will use a real estate agent to try to get it sold. One thing to note is that these properties are sold as-is, so if you’re looking to buy one, that’s something to keep in mind. There are three main ways to find pre-foreclosed homes. The first is to check with the County Clerk at the County Recorder’s Office. There, you can look up Notice of Default (NOD), lis pendens (“an official notice to the public that a lawsuit involving a claim on a property has been filed,” as defined on Investopedia), or Notice of Sale public records. There’s also a good possibility that you’ll find properties that aren’t yet online.
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