Pre-Foreclosure Leads: How to Find Them

Investing in real estate can be a daunting process. However, when done correctly it can be well worth the effort. Of course, the objective is to buy low and sell high, and searching for pre-foreclosure leads can prove to be an advantageous strategy if and when you are able to actually score a deal. The following is a quick review of pre-foreclosure leads, including what they are, as well as how to find them and use them for monetary gain:

What Are Pre-Foreclosure Leads?

Pre-foreclosure is basically the first step in the foreclosure process, starting when the holder of a mortgage loan fails to make one or more of his monthly payments and receives a “Notice of Default “ from his or her lender. A “Notice of Default” is a public notice filed by the lending company that serves as a warning to the borrower, providing him or her with one final chance to remedy an account that has gone into arrears before the lender places a lien on the property and eventually assumes full possession of it. Pre-foreclosure leads, therefore, represent information on the properties for which borrowers are at risk of losing. Quite often, the people with pre-foreclosure properties need to figure out a way to repay their loans quickly and are more willing to consider a short sale so they don’t lose even more of their money. Savvy investors can use pre-foreclosure leads to potentially negotiate a really good real estate deal.

How to Find Pre-Foreclosure Leads

There are many ways to find pre-foreclosure leads. Indeed, modern technologies are making it easier than ever to identify and contact the borrowers of properties at the beginning stages of foreclosure. Here are some options:

• Consider Using a Lead Generator Tool: For example, our Haines Criss+Cross™ database contains detailed property and homeowner information on every residential and commercial property on the market and can be searched according to over 300 variables, including pre-foreclosure notices. The small expense of using a commercial data service can be more than compensated for with just one productive lead!
• Peruse Online Resources: Many online directories, like Zillow, are free to use and can be searched for pre-foreclosure leads. Indeed, Zillow’s website includes an entire foreclosure section, which allows users to find pre-foreclosures, foreclosure auctions and bank-owned properties in any area of the country.
• Check with Real Estate Agents and Local Attorneys: Working with a real estate agent or attorney can be particularly helpful for new investors with less experience. Agents have access to the Multiple Listing Service (MLS), a proprietary database of properties that can only be used by real estate professionals. Many agents can also provide access to real estate attorneys representing clients in pre-foreclosure and/or those who have been willed a home or property they can’t afford. Bear in mind, though, that many times working with a professional will entail a commission of some sort.
• Review Public Records and Newspapers: Of course, anyone can find pre-foreclosure leads if they know how to search public records and/or can read a newspaper. Remember that “Notice of Default” mentioned earlier? By law, mortgage loan defaults must be publicly reported by the court and, thus, their details are published in the legal section of local newspapers and filed with the county clerk/recorder of deeds. Searching for documents mentioning “Notice of Default” and “Lis Pendens” can help potential investors locate homeowners facing possible foreclosure so they can contact them. Most of the time, access to newspapers is free at any public library, while public real estate records are always free at their issuing courthouse. However, although using this method of gathering pre-foreclosure leads is inexpensive, it does require experience since there are no photos or property details to view and no agents listed who can help with sale negotiations. Investors will need to physically drive by properties and/or locate a real estate professional for more assistance.

The Haines Advantage

There are many options for identifying pre-foreclosure leads, but working with a partner that understands real estate and can quickly identify only the most relevant leads is really the only way to maximize your time and your money. Our Haines team has nearly a century’s worth of experience. We can supply the data you need to make meaningful decisions, thereby increasing your ROI. Please contact us to learn how our services can help you.

You might also like to download our free eBook, “10 Ways to Find Leads for Your Mortgage, Insurance, Real Estate or Home Improvement Business.”

Haines has years of experience helping real estate agents market their businesses.  Contact us for more information on our Property Connect lead generation tool and more helpful real estate tools and tips!