It's unfair but true that you can make profits from others' bad luck, says Joseph Haymore. Foreclosed homes are often sold for prices far below their market value because their owners are desperate to get rid of them. The low prices do come with drawbacks: some homes have claims against them, loans are linked to them or it is hard to inspect such homes before their sale. But if you're ready to face the risks, then your first job is locating the deals. Here are five ways to find the best bank owned homes for sale.

1. Live Auctions

According to Joseph Haymore, live auctions are events where foreclosed properties are sold to the highest bidder. These auctions can happen at different places, like courthouses, convention halls, or even the property itself. You can usually find details about these auctions in local newspapers. The homes sold at live auctions often go for significantly less (30% to 60% below market value), making them attractive to buyers looking for good deals.

 However, it's important to note that you need to pay the full price in cash immediately if you win the bid. Additionally, these properties are sold "as is," meaning you can't check them beforehand, which can be risky.

2. Online Auctions

Online auctions work like live auctions but take place on websites. The main difference is that you can join from anywhere with an internet connection, which gives you comfort. These auctions often have a hidden set price, which is the lowest amount the seller is willing to accept. Bids are placed online within a specified timeframe, and if the reserve price isn't met, the property won't be sold. This method allows buyers to find and bid on foreclosed properties without the need to travel.

3. Bank Websites

Banks often have sections on their websites dedicated to listing foreclosed properties that were not sold at auctions. The bank refers to these assets as real estate owned (REO). Since banks want to sell these houses quickly, they may offer them at discounted rates to cover the leftover loan amount. Checking bank websites regularly can be a good way to find foreclosed homes across different states and cities.

4. Government Agency Websites

Government agencies like HUD (U.S. Department of Housing and Urban Development) and Fannie Mae (Federal National Mortgage Association) list foreclosed homes on their websites. These houses are usually seized due to a lack of taxes or mortgage loans. Government-owned listings can create unique chances for buyers to invest in affordable real estate investments. Visiting these websites allows you to look at available properties and contact agents for them.

5. Asset Management Companies

Some lenders hire asset management firms to manage their REOs. These companies are experts in managing and selling foreclosed properties on behalf of lenders. By visiting their websites, investors can browse a wide range of foreclosed homes listed by different financial institutions. 

6. County Office Websites

County offices keep records of foreclosures, and many publish these listings on their websites. This can be a valuable resource for investors looking in specific areas or neighborhoods. County websites often give detailed information about upcoming auctions and property details. Checking these websites regularly can help investors stay informed about local foreclosure opportunities.

7. Real Estate Agents

Local real estate agents can be valuable resources for finding foreclosed properties. Some agents specialize in handling bank-owned properties and have access to the MLS (Multiple Listing Service), where foreclosures are listed. They can help buyers throughout the purchasing process, from finding suitable properties to negotiating deals. Real estate agents are very helpful for first-time investors who may need advice and support.

8. Real Estate Signs

Driving around neighborhoods with high foreclosure rates can lead to finding properties with foreclosure signs. These signs typically show that the property is bank-owned or in foreclosure. Sometimes, these properties may also have open house signs, allowing eager buyers to inspect the interior. This method is useful for investors looking to personally inspect properties before making a purchase decision.

9. Mashvisor

Mashvisor is a specific real estate investment tool that provides full information about foreclosed properties. Investors can use Mashvisor to search for foreclosed homes based on specific criteria such as price range, choice of rental strategy (traditional or Airbnb), expected rental income, cap rate, cash-on-cash return, property type, and more. Mashvisor also offers investment analysis, which helps buyers figure out the possible return of each property before making a purchase.

In Closing

To sum up, looking for bank-owned homes can be a great way to find real estate bargains. You can locate these properties through live or online auctions, bank or government websites, or by working with real estate agents and asset management firms. Joseph Haymore suggests keeping in mind that there are risks, such as purchasing a home without first viewing it or needing quick cash at auction. Understanding these options can help you find the right bank-owned home that fits your investment goals and budget.