How to Find Out How Much is Owed on a Bank Owned Foreclosure Property?

Investors and homeowners alike need to do thorough research before getting into a purchasing decision on any property – especially a distressed property. The amount owed on the loan, any tax liens, and other liabilities are all important to know before investing or purchasing.

One way to do your due diligence is to look up how much is owed on a bank-owned foreclosure property. This is important to know because the purchase price for the home, be it an REO home or a foreclosure at auction, is based off of the amount owed on the loan. The bank is seeking to recoup its losses, and while most of them will not do that on an REO home (or even a foreclosure), it is trying to get as much as possible.

We'll first look at foreclosure properties, then talk about REO homes.

For foreclosures, you have a few options. The first option is to actually talk to the homeowner and ask permission to get a payoff amount from their lender. This doesn't always work, though, so most skip this step and head to the county courthouse and look up public foreclosure notices. In some states, this information is public record. Of course, you could also skip both and go to a foreclosure listing service, which will tell you approximately how much is still owed on the loan.

For an REO home, you can contact the lender directly via your real estate broker and inquire as to their asking price. Title companies also have this information. Note that the asking price is probably more than the amount owed, unless the property has been on the market for months and the bank is desperate to sell it.

Either way, consult listing services and work through your broker to find out how much a REO or foreclosure is "worth" (based off of the amount owed) before you go shopping.