First Person: Finding Foreclosed Properties in Your Area

With the abundance of distressed properties (i.e. short sales, foreclosures) on the market these days, many people-both owner-occupants as well as investors-are constantly inquiring about foreclosures. Almost daily, potential buyers ask me: "Where can I get a list of foreclosures? And where can I get that list of properties for free?" They are trying to figure out how to find all of the properties that are available for sale, and how the purchase process works.

While the process to purchase a foreclosure may vary, depending upon the seller, the stage of foreclosure that the property is in, as well as the general market that the property is in, finding the distressed properties for sale, however, is a much more identifiable process.

Several companies offer subscription-based services for foreclosure information, such as RealtyTrac.com, Foreclosure.com, and others. However, there is no way to ensure that the information on these sites is completely true and accurate, since it is derived from several different sources, and the information needs to be constantly updated. Truth be told, foreclosure information is public information, and is available free of charge to anyone willing to put in the time to do their research.

The largest sellers of foreclosed properties are Fannie Mae, Freddie Mac, and the Department of Housing & Urban Development (HUD). Fannie Mae foreclosures are typically listed on their website at www.homepath.com, while Freddie Mac foreclosures are typically listed on their site at www.homesteps.com. HUD foreclosures are typically listed at several sites, including www.hudhomestore.com. These are the primary sources that I use for foreclosed property information.

In addition to these websites, some banks list real estate-owned (REO) properties on their individual sites or you may be able to find out which Asset Management Company handles their REO on the bank's behalf. The Asset Management Company would then likely have the properties listed on their company's website.

Once you have found a property that you are interested in and would like to purchase, the process and forms to complete are likely to be much different than a typical real estate transaction. The important thing to remember is to communicate frequently with your real estate agent (who should be communicating frequently with the seller's agent) and to provide all information requested for the transaction.

While finding a property in foreclosure may not be as difficult as you first may think, actually going through the purchasing process is a different matter. Be sure to work with a local real estate agent to make your purchase come true.

More from this contributor:
Why Now is a Good Time to Buy a Home (Really)
Why Buyers Still Need to Shop Around for a Home Mortgage
Why Most Real Estate Investments Don't Meet Expectations