How to Build a Foreclosure Auction Target List

Trustees, sheriffs and courts schedule far more foreclosure auctions than any one buyer could research. Many of those sales will be postponed or cancelled, and many of the properties that do sell will not fit your budget or plan. A target list is the filter between every scheduled sale and the handful of properties you research in depth.

Think of it as a funnel with three stages:

1. Find every scheduled sale in the areas where you buy.
2. Screen each one against a few simple criteria, such as location, opening bid, estimated equity and visible condition.
3. Track the properties that pass until the sale date, updating their status as sales move or drop off.

The goal at this stage is not to find a perfect property. It is to rule out quickly the properties that cannot work, so the slower work of title searches and valuation goes only to real candidates. If you are new to auctions, read how foreclosure auctions work first, since your state's sale process shapes where notices appear and how sales are run.

Where sale notices appear depends largely on whether your state uses judicial foreclosure, non-judicial foreclosure or both. Common sources include:

• Notices of trustee sale. In non-judicial states, the trustee typically records a notice of trustee sale with the county, mails it to the borrower and posts or publishes it. Recorded notices can usually be searched at the county recorder's office or website.
• Court and sheriff calendars. In judicial states, sales follow a court judgment. Court dockets, sheriff's sale lists and clerk or referee calendars show upcoming sales, often with a case number you can use to follow the file.
• Legal notice publications. Many states require sale notices to run in a newspaper or legal publication for a set period before the sale.
• County and trustee auction platforms. Many counties and trustee firms list sales on online auction sites, sometimes with opening bids and live status updates.
• RealtyTrac auction listings. You can search upcoming foreclosure auctions on RealtyTrac to see scheduled sales across a market in one place, then confirm the details with the official source.

Earlier filings, such as a notice of default or a lis pendens, can tell you which properties may reach auction in the coming months.

Watching homes in pre-foreclosure lets you start research before a sale is even scheduled. For more on those early records, see finding pre-foreclosure properties.

Screening goes faster when you decide in advance what you are looking for. Write down criteria such as:

• Location. The counties, cities or neighborhoods you know well enough to value without much extra work, and that you can reach for a drive-by.
• Property type. Single-family homes, condos, small multifamily buildings or land. Condos and homes in an HOA bring association liens and rules to check.
• Price range. The highest price you could pay in cash or certified funds by the auction's deadline, with reserves left over. See how to line up funds for a foreclosure auction.
• Strategy. Whether you plan to renovate and resell, rent or live in the property, which affects how much repair work, time and risk you can absorb.

Keep the criteria short. Four or five filters applied the same way every time are more useful than a long wish list applied inconsistently. Revisit them every few months as you learn how your market behaves.

The quickest financial screen compares a rough value with the price you would likely have to pay. Where the opening bid or estimated debt is published, compare it with a quick value estimate based on recent nearby sales. The gap is a rough measure of the equity available at the sale.

A quick screen might sort properties like this:

Remember that the opening bid is often the lender's credit bid, not an appraisal. When no bid is published, the recorded loan amounts and a rough loan-to-value ratio can hint at whether equity is likely, but the lender's actual bid can be higher or lower than you expect.

At the list stage, condition screening is light. Use what you can learn without visiting the property:

• Public records for size, age, lot and property type.
• Past listing photos and street-level imagery for the general state of the exterior.
• Code enforcement, permit or vacant-building records that suggest serious problems.
• Neighborhood factors such as recent sale prices, rental demand and how quickly homes sell.

Signs that a home may be vacant are worth noting. A home abandoned during the foreclosure, sometimes called a zombie property, can have deferred maintenance, weather damage or vandalism that pushes repair costs well beyond what photos show. It may also be simpler to take possession of after the sale. Flag it either way rather than deciding now.

Save the drive-by, the title search and detailed repair estimates for properties that pass these first screens. Those steps are covered in researching a foreclosure property before the auction.

Many scheduled sales do not happen on the first date. Lenders postpone sales for loan modification reviews, bankruptcy filings, short sale negotiations, state mediation programs or paperwork problems. Sales are cancelled when the owner pays off the loan, completes a reinstatement or sells the home. How postponements must be announced varies by state, and in some places a sale can be postponed by an announcement at the scheduled time and place.

A simple tracking sheet keeps this manageable. Useful columns include:

Check status on a regular schedule, such as weekly, and again the day before and the morning of any sale you plan to attend. Repeated postponements can signal a workout in progress that may end in cancellation, so weigh how much research time to spend on those properties.

As each sale date approaches, rank the properties still on your list by how well they fit your criteria and how soon the sale is. Start full research on the top few early enough to finish a title search and valuation before the sale. If you cannot finish your research on a property, take it off the list for that date.

Over time, your list also becomes a record of your market. Noting which properties sold to third parties, at what prices, and which went back to the lender helps you set more realistic filters. If you have not bought at auction before, consider following and attending a few sales as an observer first; see auction day bidding strategy.

Rules on notice, postponement and who may bid vary by state and between judicial and non-judicial sales. A local real estate attorney can explain how sales are scheduled and announced where you plan to buy.