Forclosure lists -- are any of them for real?

Question

I am a new investor and am very tempted by the foreclosure lists that I see online.  Are any of them legitimate or are they all scams?

Please tell me your experiences with them.

N/A N/A · Answer

Really what you are talking about is REO (real estate owned). That is, property which went through foreclosure and is now owned by the bank (or HUD, the VA, etc.). At least where I am, these properties are all listed by real estate agents and are available on the MLS. They are listed for less than other properties of comparable size in the neighborhood, but there are a couple of things to watch out for. First, these properties are often in less-than-stellar shape. Also, those that I've looked at are only sold "as-is," and inspections are more difficult because all the utilities are usually turned off (and, in the case of the plumbing, winterized). So there's a little more of a gamble to them. I've bought two houses like this, and both turned out to be great deals for me.

The bank (or government agency) wants to get as much as they can for the property, but there is definitely room for negotiation. It can be difficult for them to really know the best price to list at, because the majority of recently-sold houses did not have these issues. Ignore the list price, and instead figure out what price would make it a good deal for you. If the two numbers are close, you might be able to get the deal you want. If not, you can still go ahead and try. I'd also keep my eye on those that you see as potential deals, because even if you can't come to a price, the bank may be more willing to negotiate if some time goes by and they don't get any offers to their liking.

N/A N/A · Answer

So in your opinion, are the paid-for subscription services worth the dough for the serious invertor?

Are you a pating subscriber?

Is the information on the paid sites current?

A little unrelated...When you see a home in foreclosure, obviously the price is lower than most of the nearby properties listed with agents. How much can you expect to get off the asking price of a foreclosure? Is it like any other purchase where the asking price is the beginning point of negotiation? My thought is that if the property is owned by a bank that won a court auction for the peoperty, have they listed it at a bare minimum price already?

These are probably very ignorant questions, but this is the beginner forrum...
Thanks, JonDenver

Tom McGiveron · Answer

i will give my opinion on this foreclosure list thing.

IF you are dead serious about real estate - and that means you've got it all together. you've done your homework.  you've got a system in place.  you've got the cash, the financing, the contractors, the know how to GET IT DONE!  then yes, all avenues you should consider.

HOWEVER, you also have to do the work.  you can't sit back and just "subscribe" to a foreclosure list and think it's gonna happen.

you're in a competition with others who KNOW WHAT THEY'RE DOING and are way beyond any little foreclosure list.

foreclosure lists are good for you to get a general idea of what's out there.  it's up to you to go out and get'em before they get on the foreclosure list.

Tom Wood · Answer

My experience is they are for real but not very timely.  In most cases I found the deals that were real good were already under contract by the time they got to the website.  You might want to try hud.gov for HUD homes (Free) or www.homesteps.com for Freddie Mac homes (Free).  There are probably others which are also free.  Both these sites allow you to setup e-mail criteria to receive new listings.