Despite the reported upswing in foreclosures, it actually is not easy to find them. Nor, once you locate one to buy, is the purchase process simple. Even if done right, it can take a while to find and buy a bank-owned property. And the process is fraught with pitfalls.
Foreclosures are plentiful -- in October alone, banks repossessed 5,803 homes in six Southland counties, up from 753 during the same period a year ago, according to DataQuick Information Systems.
But it would be hard to tell by driving down the street -- banks typically don't trumpet that status on frontyard for-sale signs.
In a perfect world, there would be one master list of all foreclosure sales, a computer click away. But this isn't a perfect world.
Foreclosure seekers must rely on bank lists, the Multiple Listing Service, tax records and websites, according to experts who search daily for such sales. "You can Google and maneuver websites all day, but it's not easy to get what you want," said Scott Chapman, a Long Beach agent and foreclosure specialist.
Some buyers are going directly to banks. Big lenders, such as Bank of America, Wells Fargo and Washington Mutual, sometimes let customers peruse their lists of foreclosed properties at local branches. It's prudent to check with them by phone first to see if they allow drop-ins.
But even if buyers find their dream homes on such a list, the lenders won't talk directly to them; banks hire real estate agents to market and sell the properties for them, said Los Angeles mortgage broker Mitchell Ohlbaum.
Some bank websites list foreclosed properties, but often the data are 30 to 45 days old, said Bill Nazur, coauthor of "Finding Foreclosures: An Insider's Guide to Cashing In On This Market." For a well-priced property in decent condition, that could be too late.
The websites usually refer customers to the banks' asset managers -- typically realty brokers in charge of repairing and selling the distressed properties -- but, Nazur said, "95% of the time, they don't reply to buyers, because the buyers' documents aren't in order. So they're on to the next customer." Foreclosure properties can sell quickly, some after multiple offers, so buyers must show solid proof of loan approval from their lenders.
As foreclosures have proliferated, so have Internet sites offering a host of services to help buyers find those properties -- nearly all for a fee. Some sites charge up to hundreds of dollars for lists and other help that's available for free from banks and public records.
Two of the more comprehensive and well-trafficked websites, www.realtytrac.com and www.foreclosures.com, provide lists of homes in default and in foreclosure and information on how to buy bank-owned properties. The fees are about $50 per month.
RealtyTrac has links for customers to check neighborhood "comparables" -- the prices of similar recently sold homes. Comparables are available from real estate agents for free. Buyers who do these searches themselves, however, must devote a great deal of time to the process.
RealtyTrac customers are offered seven days' free service, but they must give their credit card information to get it and remember to cancel the subscription within seven days or a paid subscription will kick in.
Bank-owned listings can be found on agents' personal websites and the MLS, the broker-controlled database that combines listings of all available properties represented by real estate brokers. But agents say the MLS site is difficult to navigate. The Realtor.com site includes foreclosed properties, but they're mixed in among other listings. Hermosa Beach-based Catalist Homes' website -- www.catalisthomes.com -- filters out pre-foreclosures; its list has only those properties for sale that are bank-owned, not those in the default stage, which often never reach the market. When properties are sold, Catalist flags the listings as such. The service is free.
The easiest way to find foreclosed properties, experts say, is through real estate agents who specialize in those sales. They've done the research, saving buyers the trouble.
Even after finding a property, the purchase process can be a bumpy ride for novices.