These methods work in Florida because we have mortgages, however I am not sure of the process for states that use deeds of trust. Much of this information will apply to Florida and its laws, so it is best to get the general gist and apply it in your area.

I have purchased several properties in the last 6 years in the Sarasota, Florida area when encountering pre-foreclosures. Pre-foreclosures are simply homes that have gone into foreclosure but have not yet sold at auction.

This used to be a great way to acquire undervalued real estate. However, recently it has not done so well in the Sarasota, Florida real estate market. I started with pre-foreclosures because I didn’t have the money to buy houses at county auctions. Auctions generally require you to pay cash on the day of the auction.

Step 1 – Look for your county website that contains information about the court. Many counties now have their court information online, however smaller areas may not be as advanced yet. Basically, you are trying to find information about lawsuits.

Step 2 – You will need to look for people who are being sued by your mortgage lender. In my area, the first step to foreclosure is the “Read Pendens”. Latin means “a pending lawsuit,” a written notice that a lawsuit has been filed that concerns title to real property or some interest in that real property.

When a homeowner defaults on their mortgage, the time it takes for a bank to initiate a foreclosure process varies. However, I have noticed that it is around 4-6 months. I suppose that the banks calculate that at that moment the owners are too involved and will not be able to get ahead.

Each county computer query system will be different, so this is where you’ll need to do a little research. Typically, you will see the big banks or lenders vs. Joe Schmoe. This is the first step in the foreclosure process. These people are going to be in foreclosure.

Step 3 – Once you have found the “Lis Pendens”, create a list of people who are in foreclosure. Take this list and cover them with your county property records. Know your local real estate market. I’m a real estate agent here in Sarasota, so I know the real estate market well. There will be houses that you may not want to buy, so there is no point in pursuing them. You also need to know the real estate market to know if what you are buying is a deal. There is no point in following these steps if it is only going to be a home for retail sale. The point is to buy the undervalued home. You need to know the real estate market to determine what is a good deal and what is not.

Step 4 – Get in touch with these people: find the way to contact them that best suits your personality. You can call them on the phone, knock on their door, or write them a letter. I took the least aggressive approach and wrote letters. Sometimes these people do not want to receive phone calls or be contacted in person because they may have already received harassing phone calls from banks and bill collectors.

Step 5 – Try to buy the house. Be understanding of your situation and try to find a win-win scenario for you and the owner. Obviously, you are trying to buy the house at an attractive price for you. This price will depend on what you plan to do with the property. If you plan to live there, you don’t need a big discount. If you plan to flip it, you need a bigger discount.

Here are a couple of things to remember about buying homes in foreclosure:

• Banks will take less than what is owed to them. If you find a large mortgage relative to its value, you may need the bank to discount your mortgage. I have done this with clients when selling their home. However, banks are not stupid and they know that real estate values ​​have risen in recent years so it can be difficult.
• Here in Florida, the foreclosure process from start to finish typically takes 3 to 6 months.
• You can get someone out of foreclosure until the actual sale of the foreclosure, and in some cases, even after the sale.
• Legitimate lenders don’t want to repossess and repossess homes.
• In most situations, you will be dealing with the foreclosure attorney, not the actual bank filing the foreclosure claim.

This information will help you get started finding pre-foreclosures to buy. In closing, I will say that it was since November 2003 that I bought my last house in this way. I bought a house for $ 69,000, spent around $ 30,000 cleaning it, and as of today, it will sell for around $ 270,000. Of course, home prices in my market have risen dramatically since I bought that home.

Lately, like other markets, my market has been too hot to find such an undervalued property. With the number of articles in the local newspaper, most people are aware of how hot the market is. However, in recent months the market has slowed down. As a real estate agent, I have seen many people struggle to get into a house that they really cannot afford. Flexible loan policies should lead to more foreclosures. Good luck.