All too often, someone thinks that they can get rich in foreclosures without much effort at all. They figure the first step is to find a foreclosure through some sort of foreclosure listing website, and that will be their key to unlocking fortunes in the foreclosure market. They are too cheap to pay for some sort of premium foreclosure listing service, so they choose to go for the free trial or just use sites that list foreclosures for free. They are plotting to make thousands per house, but are not willing to pay the few bucks it usually costs to find them.

There are several costs of trying to save on foreclosure listings. Let’s go through them from least costly to most costly. The first is if they reckon they are getting a fantastic deal by signing up to some trial offer for a buck. A buck is worth it to find that foreclosure that will make you thousands. But you need to be very careful when signing up to free trail offers that require you to enter your credit card info. Most people forget to read the fine print. You are really signing up for their monthly billing, but they are just giving you a free week at the start. You must cancel your account before that free week is up if you don’t want to be charged the monthly membership fee automatically. Most people sign up, look at a few foreclosures, realized that it is going to be a lot more work and risk than they thought initially and forget the whole thing. They also forget to cancel their account and end up getting billed a few hundred more than they expected.

The next way that people get burnt is when they try to use some sort of foreclosure listing service that is 100% free. These listing services are often times full of mistakes, outdated information and incomplete information. Most of the free foreclosure sites that I have seen have 1 to 2% of the listings that the paid foreclosure sites have. All too often, people who are serious about foreclosures try to save a buck by using free services and end up forgetting about foreclosures and moving on. They can’t even get a start on a single property because the information is so incomplete or outdated. If you are really serious about investing in foreclosures, make sure to get yourself a decent foreclosure listing service.

Another way that hurts potential investors is trying to read the legal notices section of the local newspaper. All foreclosure auctions have to be listed for a certain amount of time (varies by state) in a local paper. The unknowing investor picks up the paper and thinks it will basically just be a classified for foreclosed homes. Incorrect! All they see is legal jargon and figure you have to be some sort of professional to do foreclosures. It’s too hard for them so they just give up right there.

One last final way that investors get burned is when they go to some sort of auction and start bidding trigger-pleased on foreclosures they know nothing about. They might buy a house that needs more repairs than is worth. They might be buying a worthless junior mortgage instead of a senior mortgage. There might be property tax leans up the yin yang on the home you just bought. The property might even get bid well above honest market value by unknowing investors.

Dealing with foreclosures is risky business. It is best to study, read and learn, then take action once you are comfortable. Know the game before you get into it.

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Tagged as: Foreclosure, Free, Listings