7 Basic Steps To Aquire a Foreclosure Once You Find a Property – Step #1

Step #1 – Look at the Property

Foreclosure signLet’s assume you found a property from one of the foreclosure sites I mentioned in my previous post “How to Find Foreclosures – Where Do I Start?” or in a legal notice from your newspaper. You’re excited with the information you read about the property and you’re ready to start doing additional research. At this point it’s a good idea to go look at the property before you spend any of your time processing the legal work. Until you do that, you don’t even know what the neighborhood looks like, the condition the property is in, and if it’s vacant or not. If you don’t know these simple things about the property, you’ll never know how risky of an investment it could or could not be.

What happens if the legal description or foreclosure notice you read doesn’t list the physical address? You have a couple options like contacting the title company and asking them to lookup the street address, calling the attorney that’s managing the foreclosure, or go down to the courthouse and look it up. Once you get the address, you can continue reading below.

Once you arrive at the property you’re only able to in most cases, view the outside of the home. You really need to see the inside if you are to properly make a decision and this is always extremely difficult because it’s not like an open house. There are several options here and it really depends on your judgment and comfort to be able to have a peek inside. Your options are to walk up the steps and knock on the door and see if anybody is home, if the house looks vacant or abandoned maybe take a quick walk around the property and peek through any windows without disturbing the neighbors, or just walk away and look for a different property. Now I’m not suggesting you trespass nor illegally enter a property and that’s why I said use your judgment. If it’s nighttime and you’ve got a flashlight it’s probably not a good idea to wander around the property unless you want the local authorities coming by to meet you.

Let’s say you were able to see the property and got a nice glimpse of the inside. You felt it’s a good prospect to bid on. Your next step is determining what it will appraise for. I’d recommend you hire an appraiser, realtor, or another investor who has more experience to help you pin down an approximate price on what it will appraise for. There’s a good chance depending on if you were able to get a glimpse of the inside in the previous step, that the appraiser will not be able to look at the inside and only give you a rough appraisal based on what he or she can see on the outside. Of course, there are exceptions, and you might not be too disappointed if you trust just the condition of the outside.

Stay tuned for step #2 – Contacting the Trustee

26 thoughts on “7 Basic Steps To Aquire a Foreclosure Once You Find a Property – Step #1”

  1. This is great information for first time investors. Don’t get too emotional about the home. When you find a good deal you need to jump on it quickly. You should start with neigborhoods that you are familar with so you know the price of the properties in the area and understand the market trends. My advice would be to have your team ready before you choose to move forward.

    Try starting with the following people in your team: an appraiser, an inspector, termite inspector, mortgage broker, realtor, handyman (contractor) – and an experienced investor that can mentor you through the first home. Even if you have to pay the mentor a small fee – they can save you thousands of dollars in mistakes.

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    feel free to contact me directly at (407) 218-6595

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  4. I would also suggest that a new investor even partner up with an experienced investor and go knock on the doors of preforeclosures. Talking to the homeowners and getting them to work with you and trust you is one of the most important parts of the whole process. You can learn a lot from an experienced investor who has done this before and they will be able to help you determine if its a good deal on the spot instead of having to come back later and possibly losing it to someone else.

    Great blog that you have here. I have one at http://www.georgiabuyer.com if you would like to stop by and take a look sometime that’d be great.

  5. There are definitely many bargains in this niche of the market.. You gotta attend the auction with a check in hand though so do your research before you commit.. Great article..

  6. Investing in pre-foreclosures is getting to be real tricky these days. Your advice is a great help. Particularly about getting an appraiser involved to determine the value.

  7. I have been making offers here on Cape Cod for many buyers. There apears to be a $30k to $50k gap between buyers’ offers and the banks’ sale points. Many offers are going un answered if they are below 80% of asking. It appears that banks are trying to hold values up, anticipating more foreclosures in the inventory. The indications are that there will be many more coming on the market. Also, if interest rates rise after the election in Nov, there will be many more on the market next year. This is an interesting time to be a broker as well as an investor.
    My site REindex.com, The Site Engine(sm) shows that there are a lot of people looking in Michigan and Louisianna for real estate. Those are supposed to be depressed areas but may also be good places for deals.

  8. Buyers also should realize that Foreclosures are not for everyone. Buying a foreclosure can be a good investment but like all investments, it requires Due Dillegence, there are additional risks and it is not a way to get rich quick.

  9. Interesting post. Felt good reading your post. My brother and I have been using John Beck�s program quite a while. We even have our own separate blogs on our small business. We�ll be waiting for updates.

  10. Looking at the property and having an initial walk-through of the house is very crucial when buying a foreclosed property. Make sure to check every single aspect of the house to be sure you are getting a good deal out of it.

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