3 Ways to Buy a Foreclosed Home in Southeast Louisiana

By Gregg Tepper

I have been married to my wonderful wife Letha for 30 years. We have 3 children: Max, Alexander and Charlotte. I have been a licensed Realtor in the New Orleans area for 21 years and am the Operator of The Tepper Group with Keller Williams Realty in Mandeville. Our team services the entire New Orleans and Baton Rouge metro areas. Our team of partners has well over 70 years of experience. In the last 2 years we helped 269 families buy, sell and lease homes, land and commercial investments.

Buying a foreclosed home is more approachable than most people think. If you’re wondering how, the key is understanding that there isn’t just one way to buy a foreclosed home.

There are three, each with its own process, price, and level of risk. Before we get into them, one important note: every state handles this a little differently, and what follows is how it works here in Louisiana.

The first way is pre-foreclosure, and it’s often where the best deals live. Foreclosure is the entire process that runs from the moment a homeowner falls behind until the bank takes the property back, and pre-foreclosure is the early window when the owner is behind but still owns the home. That distinction matters, because the bank can’t sell it yet. Only the owner can.

So if you can track that owner down, whether they still live there, left a forwarding address, or turn up in a quick white-pages search, you can reach out by phone, letter, or a knock on the door. A lot of these owners are behind and simply don’t know what to do. You can offer to pay off the loan and put cash in their pocket, maybe $5,000 to $15,000.

It won’t always work, and you might talk to several people before you get a yes. The fortune is in the follow-up. But for the owner, taking your offer beats going to a sheriff’s sale, where they usually walk away with nothing.

The second way is the auction, or sheriff’s sale, and it moves fast. In our parish, the sheriff’s department holds its sale on Wednesdays at 10 a.m., and the room is full of investors, along with the bank’s attorney.

The bank is mainly trying to recover what it’s owed, the principal still due on the loan, so if the house is worth it, you can bid. Two cautions here.

• First, go watch a few auctions before you ever raise your hand, because it moves quickly and you’re up against savvy investors.
• Second, you usually can’t get inside the house beforehand, so you’re buying largely sight unseen.

Do your homework ahead of time.

The third way is to buy it from a bank, and it’s where most people end up. If the bank takes the property back at auction, it becomes what’s called real estate owned (REO), and more often than not, the bank hires a Realtor and lists it on the MLS, Realtor.com, or Zillow. From there, you buy it through a normal purchase process, and there’s still typically a discount built into the price. You may not get the rock-bottom number you’d find in pre-foreclosure or at auction, but it’s the simplest path, which is exactly why it’s the most common.

A couple of tips to save you money and headaches. You’ll see foreclosure lists for sale online, sometimes a hundred dollars or a monthly subscription, but those lists mix in pre-foreclosures with information that isn’t always clear, and the bank may not even own those homes yet.

Before you pay for one, check your local courthouse, where you can often get the same list for three or four dollars and learn a lot more by doing your own research. And whichever route you take, build a relationship with a title company. A good title search makes sure there are no surprise second mortgages and that the homeowner has told you everything they should, which matters most on the pre-foreclosure path.

Those are the ways to buy a foreclosed home. If you’d like help finding foreclosure opportunities in Southeast Louisiana, we’re glad to walk you through it. Call or text us at (985) 218-5445, email us at TGroup@kw.com, or visit findnolahomes.com.