As foreclosures become more popular, real estate opportunists offer everything from foreclosure bus tours to foreclosure lists. Unsuspecting novice real estate investors often pay their hard earned money and get little value for their investment. Many foreclosure listing websites appear to be a Godsend to busy investors that don’t have the time to search for discounted real estate investments, but what do investors really get for their lists?
Where do Foreclosure Listings get their Data?
Websites often get their data from numerous public sources. Many of the basic sources are the same. Most sites start with public records. When a bank or a mortgage holder files foreclosure action against a debtor, it must be filed as a public record. Many of these records are now online, providing these sites an easy source of foreclosure listings. Furthermore, the foreclosure action will typically include the dollar amount of the mortgage. This does not mean that the property is worth that amount, in fact often times, the property is not. The investor still has to take the time to research each property.
The better sites will claim to offer insight into auctions. Again, this is simply public information. Most auctioneers construct websites that allow consumers to view their property before the auction.
Why Pay for Free Public Foreclosure Listings?
Novice investors typically invest in these sites because they believe these listings to be a good source of investment leads. This is an incorrect assumption. These lists provide an aggregated source of public information; however, they do not offer any additional insight into pricing or the condition of the property. While the aggregation of this information is certainly worth something, a real estate investor will still have to put in a tremendous of time and effort to sift through all of the properties on the site. Furthermore, the sites have been notorious for having stale or dated information.
Alternatives to Paying for Foreclosure Listings
Investors would be better served to do the leg work themselves. Spend 30 minutes searching public records of the local municipality or simply call a real estate broker that specializes in foreclosures. These realtors could offer even more insight into pre-foreclosure and other bank real estate owned lists that may not be public. Take a weekend and attend a real estate auction. Again, this will take a little legwork, but novice investors can learn a lot from attending an auction. These more personal ways of finding foreclosures also afford investors the opportunity to meet other real estate professionals.
There is nothing wrong with paying for foreclosure listings, but do not expect these lists to be filled with amazing investments. The amount of energy and effort it takes to work these lists is comparable to the effort it would take to simply disintermediate them.