There are key terms to search for REO properties. Look for "vacant homes", "repossessed homes for sale", "addendum", "bank owned houses" or "as is". If you want to track short sales, you can search for the key term, "short sale." You can also search the key term "estate sale."
Any real estate agency should have the capability to search for these properties.
In today's environment, you have a ton of foreclosure web site that tell you were every foreclosure is. They have some problems though. They are often a few days late in listing them and they only have between twenty or thirty percent of the foreclosures on the market.
It depends on how you play the system. If you search properly, you will get 90 percent of the foreclosures in a market. So if there's 3,000 foreclosures, you're going to come back with 2,700.
Also, get your hands on MLS flash. It is a program that sends an email to your account at the moment the listing goes into the MLS. Make sure you have them set it up so the foreclosure alert goes to your email box as soon as it goes out. Sometimes, they will only send it to you at midnight.
We end up getting eight different properties sent to us every day. The question is, do I get in the car and go look at those eight properties. 99 percent of the time, the answer is no.
I will consider doing this if something is listed, I know that it's in a place I have interest in and it's under priced. I might well hop in the car to check it out; I am hoping that it's not too good to be true.
My goal here is NOT to get in my car and drive around to see all of these properties.
We recently did an analysis and found that of 92 properties we had bought; only 20 percent of them were purchase in the first few days they were on the market. The other 80 percent had been on the market for 120 days or more.
So when I am searching, I filter the criteria to say, "days on market." Then I look at a minimum of 120 days.
This is when they start to go through a series of price reductions. We are more likely to get the house on our terms. So, I would rather buy a property that's been on the market for 120 days over something that's been on the market for 30 days. It makes it easier for me to look for a bargain.
If it's a great deal, we will jump in the car and look at the property. But usually, I make the decision right there in my office.