Foreclosure Research

Because there's so much to do and keep track of in the foreclosure business there's constant pressure to get it all done on time. And because of such pressure and trustee sale deadlines you'll be prone to cutting corners. Just be absolutely sure that you don't cut corners in such vital areas as doing thorough title searches and coming up with good, close approximations of the fixed up market value of the foreclosures you're chasing.

Foreclosure research starts with knowing about all the new foreclosures being filed in your county every day. If your county has a population base of 1 million or more there should be one or more local foreclosure notice services you can subscribe to for about $80-$100 per month. By all means subscribe to the best one available. If you can get their information electronically, via the internet, so much the better.

If there's no notice service available then you'll have to visit your county recorder's office every week and pick out the newly recorded Notices of Default (NOD's) and Notices of Trustee's Sale (NTSs) that were recorded since you were there last. Sort through the notices and discard those that don't fit your requirements for 1) location, 2) type of property, and 3) dollar limitations. Then call the various trustees and verify that the remaining deals are still "on". File and track them by their upcoming sale dates. Start your title search work on those that are scheduled for sale first.

The most efficient arrangement you can have is to hire a title searcher (who works in the searching department of a local title company) to run each of your sorted selections through their title company's computerized database. Many title companies allow their searchers the privilege of such outside business as long as they do it after hours or on Saturdays. A complete computer run should only cost you one dollar each since they can do about 60 or more in an hour. It should be made up of three components: 1) the Tax Roll will give you a physical description of the property along with the details of the property's tax bill; 2) the Title or Map run which lists in recorded order all voluntary liens, deeds, and reconveyances for about the last 30 years and then 3) the General Index Search (for all involuntary liens). Our searcher also includes a Property Description run that recites the number of bedrooms, baths, square footage, garage, pool, age, zoning, etc.

Such title company searches allow you a very quick, cheap means of cutting your initial "quick picks" down to a manageable number of deals. At this point they'll be pared down to about 20% of the number that initially caught your attention on the foreclosure notice sheets. They're the only deals you should spend your searching skills on by reconciling the title company's computer run against what appears in the county recorder's grantee/grantor alphabetical index. When there's a variance or inconsistency between the two records (which occurs on about 2% of the deals) you should always side with the recorder's official record.

You'll spend some quality time arriving at the current, fixed up, fair market values for the foreclosures you're following. You have to have that value in order to figure the maximum you'd bid on any particular foreclosure going to sale.

A good start is with the monthly publication that many appraisers use in CA. It's called the AIRD (Appraisal Institute Residential Database). Its data is compiled from the thousands of new appraisals that are ordered by local lenders every month to vouchsafe the financing of current home resales and refinancings. What makes the AIRD so handy and quick to use is that it's indexed by the local, county Thomas Bros. Map pages.

You should also subscribe to a countywide, online, property information service. It's sector indexed by address, assessor's parcel numbers, owners' names, plat maps and recent sales so you can independently double-check the information provided by your foreclosure service.

The various publishers (1st American, DataQuick, MetroScan, etc.) all get their data from the humongous, main frame, computer tape rolls that they buy directly from the local county assessor's office. They reconfigure the information into friendlier formats that are a lot easier for small businesses and individuals to manipulate and use.

If you can get access to current, local Multiple Listing Service (MLS) information it would be quite helpful. It allows us to check for any past and current listing information that might exist on any foreclosure prospect just prior to working up our maximum bid.

You'll save yourself lots of precious time and won't get so frustrated if you wait until just before the trustee's sale before finally driving out to the look at the foreclosure and the comparables you've found for it. Right now (6/06) about 85% of all foreclosures are cured and never go to sale. So exercise some patience and wait until a day or two before the scheduled sale.