Buying with the Help of a Bank Foreclosure Listing & Foreclosure Auctions

When a bank forecloses on a property, the county records it and services include it on a bank foreclosure listing. When a person buys real estate, that person usually has to borrow money from a bank or mortgage company. If the property owner fails to remit payment to the lender, the property goes into default.

The bank foreclosure listing lists the property at this point as a pre-foreclosure. In order to save his or her credit rating, the property owner may wish to be included on a bank foreclosure listing because he or she might wish to sell the property to an investor at a price that is up to 25% less than the value of the house. The investor needs the bank foreclosure listing in order to spot that the property is in danger of foreclosure.

If the property owner cannot sell the property before foreclosure, a foreclosure listing service will list it as either an auction property or a bank foreclosure. If it is on the foreclosure listing as an auction foreclosure, it will go up for auction on the court steps and the lender will usually be one of the bidders.

It is a risk for an investor to participate in one of these fast-paced auctions of properties that he or she finds on the foreclosure listing. The investor often does not have the opportunity to investigate or even see the property before the auction takes place. (The foreclosure listing might provide information about five comparable properties, which is better than no information about the auction foreclosure.) A foreclosure listing includes auction foreclosures because the discount that investors get from buying an auctioned property is 30% to 45%, which makes the profit margin very high.

Auctions are difficult because an investor can never be sure of the date of the auction because of frequent schedule changes. A service that provides a foreclosure listing might offer some sort of auction tracking so that they can update their clients with to the minute information about the auction.