How to Find Foreclosures and Government-Seized Homes

Guidance and home listings to help you find foreclosures

Exterior view of home with foreclosure sign
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Finding foreclosures is fairly easy in depressed markets, but it's also simple to find foreclosures in strong real estate markets. The difference between the two markets is you will find a greater number of foreclosures in falling real estate markets.

Many pre-foreclosure homes that were once offered as short sales end up as foreclosures, which are eventually deeded to the bank. The reason why purchasers may refuse to buy a short sale home could be any of the following:

Finding and Buying Foreclosures

Not every foreclosure is a great bargain, and some can morph into unexpected nightmares. There are drawbacks to buying foreclosures. Some foreclosed homes are diamonds waiting to be polished. Inexperienced foreclosure buyers might want to hire a real estate agent for guidance and assistance. There are several ways to find foreclosures, described below, whether you work with a real estate agent or not. 

Real Estate Agents

The top-producing agent in Sacramento specializes in listing foreclosures. I know who he is because I know how to enter the search values in the Multiple Listing Service (MLS) to bring up all the foreclosures.

Consumers do not get direct access to the MLS like agents do.

You can ask your buyer's agent to search for REOs (real estate owned by lenders), and when you see a listing agent's name over and over, pull up that agent's profile and look at his or her listings. You will probably find a ton of foreclosures at your fingertips.

Real Estate Signs

Driving through distressed neighborhoods where you want to buy is another great way to find foreclosures. The signs might read:

  • Foreclosure
  • Bank-Owned
  • Bank Repo

Call the agent whose name is on the sign and inquire about other foreclosure listings that may be coming on the market. Agents who specialize in foreclosures sometimes wait weeks while bank management approves the list price, so you can get a jump on other buyers by asking about new foreclosures not yet listed.

If you are working with a buyer's agent, you can ask your agent to obtain this information for you.

Major Bank Websites

Many banks maintain online lists of foreclosed properties. Not every bank will sell to individual buyers. A more common practice among the large lenders to dispose of REOs is to bundle them into a package and sell that package at a discount to investors.

Here are a few national lenders who maintain websites of bank-owned properties:

Asset Management Companies

Some lenders hire an asset management company to handle foreclosures on the lender's behalf. Wells Fargo uses Premiere Asset Services. Keystone Asset Management is a national agency that deals with defaults.

Government Agencies

Some government agencies require you to retain the services of a real estate broker to make an offer to purchase. Others will let you submit offers on your own. Read each site for more information.

Auction Houses

Auction companies hold huge auctions, sometimes selling as many as 100 homes or more in a single day. While many experts agree that auction companies often get higher prices due to the auction frenzy created among its bidders, sometimes you can find a gem in their inventory.

Internet Foreclosure Companies

Web-based foreclosure companies charge a fee for providing you with a list of foreclosure properties. They reason that it takes time, trouble and expertise to locate and assemble accurate national foreclosure lists. You may find it's worth it to let these companies search for you. 

Courthouse Steps Auctions

You might also want to try your hand at bidding for a foreclosure on the courthouse steps. Beware that professionals often rule these premises. The downside is you generally are required to pay cash and buy the property sight unseen, and you could be assuming liens or judgments and be forced to pay delinquent property taxes.

At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.