How-To: Find Bank-Owned Homes

I received a few questions in the comments and via email last week about how to find bank-owned homes, so I thought I’d put together a little guide.

For the purposes of this post, we’ll consider foreclosures in three stages: Pre-Foreclosure, Unlisted Bank-Owned, and On-Market Bank-Owned.

A home in pre-foreclosure is one where the mortgagor has fallen behind on their payments and received foreclosure notices from the bank. Often these homes are simply listed on the market as short sales, which are notoriously challenging to successfully negotiate to an eventual closed sale. I’m not aware of a way to search MLS-listed homes specifically for short sales, nor do I know why you would want to.

Given the challenges associated with purchasing a short sale, it is difficult to imagine why someone would want to directly pursue an unlisted pre-foreclosure, but here’s how you would do it if that’s the kind of thing that tickles your fancy.

First, head over to your local county records website. Using the steps outlined in this guide, search the last month (or the last two or three months) for all documents of type “Notice of Trustee Sale.” Each of the results represents a home that has received a foreclosure notice. The notice itself will tell you where the property is as well as what bank holds the mortgage. From there you can contact the mortgagor or the bank to attempt to purchase the property.

Unlisted Bank-Owned
Once the home has been repossessed by the bank, there is a much better chance of negotiating a successful purchase. However, sometimes a home may have been foreclosed on but not yet listed on the MLS. Keep in mind that this may be due to a number of issues that you might not want to deal with, including an ongoing eviction or multiple lenders with claims on the property.

There are a number of ways to find unlisted foreclosures. You can subscribe to a service like PropertyShark or RealtyTrac. You can also head straight to Google Maps (instructions here) for foreclosure data in classic Google style:

[Update 2011/01/26 – Unfortunately, Google has decided to discontinue the real estate features on Google Maps as of February 10, 2011.]

Finally, friend of Seattle Bubble Jillayne Schlicke has put together a great list of REO contact pages for national and local banks.

On-Market Bank-Owned
The easiest way to find bank-owned homes is to wait until they are listed by the bank on the MLS. Of course, by this time you can probably be pretty sure that any really impressive deals are gone, but you also won’t have to deal with evictions or multiple banks.

My preferred method of searching for MLS-listed REOs is just to use Redfin. In the search options dropdown, just un-check all the boxes except for “MLS-listed foreclosures” in the “Include” section in the lower-left. Now your search will be limited to bank-owned homes.

If there are any good resources for finding bank-owned homes that I have overlooked, please feel free to add them in the comments. Happy REO-hunting!

Full disclosure: The Tim is employed by Redfin.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.