Free Foreclosure Listings - Is There Such a Thing?

These days, it seems a lot of investors in the market for a foreclosed home are seeking free foreclosure listings as a way to save a buck. But investors should heed the warning of that old cliche: "you get what you pay for."

As the giant curtain of home foreclosure continues to sweep across the country, the number of foreclosed homes available to investors naturally increases as well. As a result, it seems that everyone is suddenly interested in the prospect of buying a foreclosure property to save some money.

In my article on the Foreclosure Buying Toolkit I explained that foreclosure listing data is one of the things the savvy investor needs in his or her toolkit. I even mentioned a few of the most popular foreclosure-tracking services that can provide such listing data. After all, you can't bid on such a property unless you know about it in the first place. That's where foreclosure listing data comes into the picture.

But is there such a thing as free foreclosure listings ... and are they worth looking into?

This question is on the minds of many real estate investors. I know this for a fact, because as an Internet publisher I am frequently reviewing search engine data to see what the most popular search topics are, and free foreclosure listings seem to come up quite a bit. This means that a lot of folks are going online each day and looking for information on foreclosure listing data of the free kind.

Foreclosure Data - You Get What You Pay For

Here's the short answer to this question. Yes, you can find websites that provide so-called "free" listings of foreclosed homes. But you and I both know the kind of quality that usually comes with free — like those wonderful "continental" breakfasts they serve in hotels.

Here's the thing about listing data. The quality of your foreclosure listing information will determine your success as an investor in foreclosed homes. The only other "ingredient" that's more important than quality data is your financing. So isn't that critical item worth investing in?

Before you answer that question, and before we go any further, we need to talk about where foreclosure data comes from in the first place...

A Foreclosed Home in the Making

When a home goes into foreclosure, it actually happens through a series of acts, as opposed to one single act. Industry folks refer to these as the stages of foreclosure. The process starts with the initial default — the point at which the homeowner fails to make a monthly mortgage payment.

Now this initial default, by itself, won't lead to foreclosure. Most banks would rather avoid foreclosure, just like the homeowner would. It's an expensive process for the banks, so they would rather the homeowner get back on track with the mortgage payments. What does this have to do with free foreclosure listings you might ask? We will get to that soon enough. It's important to start with the "back story."

So there are several stages in the path to final foreclosure, and at most of these stages some kind of paperwork is filed. Banks can't just swoop in a take people's homes away, you know. They have to go through the proper series of actions as defined by their city, county and state laws. So they must file paperwork at certain stages.

Eventually, some of these procedural filings become publicly available. Now we are getting back to the subject of foreclosure listing data, free or otherwise. So, if you were really determined to get your hands on free foreclosure listings you could scour the public records of such filings in your county. But that would be so time-consuming as to be prohibitive. Remember, there's a lot of competition for foreclosed homes in most cities, so you need to be efficient and agile.

This is where the paid foreclosure-tracking services come into the picture. RealtyTrac is arguably one of the best-known of these services, and there are some others as well. Basically, these services do all the legwork for you in order to collect foreclosure listing information in your area, just as soon as that information is available. Furthermore, they give you an easy and convenient path to this information. You can sign up for alerts on local foreclosure activity, for example, and then receive email notifications about new property listings.

Of course, it costs these companies money to provide such a convenient service. On the front end, they have efficient workflows (and people) in place to collect data as it becomes available. On the back end, they have efficient communication systems in place to get that same data to their customers who have requested it. This gives the investor constant access to fresh listing data on foreclosures in the area — and the investor doesn't have to do anything but sign up for the service.

Free Listing Data - Initially at Least

Most of these services offer a limited-time free trial, as well. So initially at least, you could have access to free foreclosure listing information. In fact, you can sign up for RealtyTrac's free trial from right here on our site.

Here's the bottom line. You could spend all your time and energy looking for free listing data on foreclosures in your area. Or you could sign up for a service that will do all of the work for you. As with anything else in life ... you get what you pay for!