How to Find Foreclosed Home Bargains

If you’re not in the real estate business, you’ll find dozens of foreclosed property websites to search. Even forsalebyowner.com lists foreclosures now. Wow! Is the Internet the ultimate source of information, or what?

That! Foreclosed properties are really the latest example of how people’s perceptions of the internet lure them into a false sense of empowerment when searching for a home or investment property. There are several “realities” that make buying that latest “steal” without agency representation a pointless waste. Here’s the foreclosure reality check:

1. Foreclosed homes are listed by real estate agents, all of them!
   1. Non-FSBO lenders. They realize that the marketing power of agency representation gives them the upper hand in selling their foreclosed inventory.
   2. Agents love it when unrepresented buyers contact them about their foreclosure listings.
      1. They only have to answer questions that the buyer is knowledgeable enough to ask,
      2. and not having to tell them about important considerations when buying a foreclosed property.
2. Foreclosed homes aren’t the only “bargains” available, and agents list the others as well:
   1. Short sales are often better bargains and much less stressful to shop for.
      1. They are better deals, because they are discounted as much as foreclosed properties, and the owner must provide a Seller’s Statement of Property Condition, and the property is almost always in better condition than a foreclosure.
      2. They are less stressful transactions, because the new regulation requires the lender to respond to the buyer’s offer within 10 days in most cases.
   2. The market is so distressed, and has been distressed for so long, that many sellers, especially those in the high-end and luxury housing market, are leaving their homes at foreclosure prices, and paying a significant portion of the costs! Buyer Closing!
   3. The level to which home prices have fallen and incentives for buyers have become fixtures in negotiations has virtually made foreclosed home pricing uncompetitive.

All the old realities about buying a home still apply. Buyers benefit most from first finding a good agent to represent them. Unless a buyer is seeking only FSBO properties, an agent will be involved in the transaction, and only agents who have entered into an agency representation agreement with a buyer will represent the buyer. The answer to the question of how to find foreclosed home deals is found in three parts. Find a good buyer’s agent, let the agent do the heavy lifting, and hunt for the deal, foreclosure or not.