How to Buy Foreclosed Homes in Florida
How to buy pre-foreclosures | How to buy properties at auction | How to buy REOs | How to buy HUD homes | Summary | FAQs
Many home buyers and investors consider buying a Florida foreclosure a way to get a property at a discount. This is a reasonable strategy, but buyers should approach cautiously.
Depending on the stage the property is in the foreclosure process, buying a foreclosed home is a bit more complicated than buying a conventional home — but it may be worth it considering Florida has such high rates of foreclosures.
If you’re new to the Florida foreclosure process, we recommend you work with experienced professionals to help you come out on top.
» MORE: Find top Florida agents, save on commission!
Want to learn more? We'll go over how buying Florida foreclosures works below.
At a glance: State of the Florida foreclosure market
- March 2022: Florida had the 7th highest rate of foreclosures in the U.S.[1]
- 3,156 total foreclosure filings out of almost 9.5 million housing units[1]
- Counties with the high foreclosure volume: Duvall, Hillsborough, Miami-Dade, Orange[2]
✍️ Editor’s take: Florida is one of the best states for buyers interested in purchasing foreclosures. Not only is Florida a relatively populated state, but it has historically had high rates of foreclosure and low taxes, making it ideal in many ways for investors and regular home buyers alike. If you’re a regular home buyer, check out the HUD Home Store first, because you’ll get first dibs over investors. If you’re an investor looking for rentals or flips, foreclosures could be one piece of a broader deal-sourcing strategy, but probably not your primary approach. In particular, investors might look to hot rental markets as good areas to buy foreclosures, such as Spring Hill near Tampa, Lehigh Acres near Fort Myers, and Palm Bay in Brevard County.[3] |
How to buy a foreclosure in Florida
“Foreclosure” is a general term that can refer to a variety of property types and/or stages in the foreclosure process:
- Pre-foreclosures: These are Florida homes that have been notified of intent to foreclose and are being listed on the open market to avoid an actual foreclosure.
- Homes being sold at auction: These are homes that have been advertised publicly for at least two weeks and are being auctioned off by the clerk of the court.
- Bank-owned foreclosures (REOs): Foreclosures that don’t sell at auction are purchased by the bank and listed on the open market with agents as real estate owned (REO) properties.
- HUD homes: The Department of Housing and Urban Development (HUD) sells FHA foreclosures via online auction. This is a good option for aspiring homeowners; HUD usually has plenty of inventory and prioritizes owner-occupant buyers.
The rules on how to buy each subset of foreclosure properties in Florida vary, so be sure to thoroughly review the regulations and potential risks before buying one of these properties.
Buying Florida pre-foreclosures
⚡️ Key takeaways
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Pre-foreclosures are properties whose owners have been notified of foreclosure intent, usually because of delinquent mortgage and/or tax payments.
In Florida, pre-foreclosure can last 8–14 months from when the borrower started missing payments until the bank forecloses on the home.
Since Florida is a judicial foreclosure state, all foreclosures must begin with the lender filing a lawsuit in state court. If a judge rules in favor of the lender, the foreclosure sale date — when foreclosure auction occurs — is usually scheduled in the next 20–35 days.
Where to find Florida pre-foreclosures
Sometimes borrowers threatened with foreclosure will list with an agent on their local MLS. You can locate these listings on RealtyTrac, Zillow, and Preforeclosure.com with the foreclosure and pre-foreclosure filters — if those filters don’t exist, you can try searching those terms in the keywords box.
Working with an agent can be beneficial here because they have access to the MLS listings before they show up on real estate websites like Zillow. Your agent can monitor the markets of interest to you and send you regular updates on available pre-foreclosures before they hit popular sites, giving you a jumpstart on the competition.
» FIND: Connect with top Florida agents, set up instant MLS alerts
How to buy Florida pre-foreclosures
Buying pre-foreclosures is similar to buying any other home. The biggest difference is the seller is distressed and needs to sell by an impending deadline.
This makes them a motivated seller, which could mean a good deal for you — but you should be kind knowing the seller is in a tough spot.
It also means you need to be able to close quickly.
If a seller lists immediately after receiving notice that their lender intends to foreclose, you could have months to complete the transaction. But if they are close to the auction date, you could only have a handful of weeks to complete the transaction.
⚠️ Short sales: Occasionally, sellers in pre-foreclosure owe more on their mortgage than the home is worth — this is called a short sale. In this case, you might have to be prequalified by and negotiate directly with their bank. Your agent will be able to guide you through this process. |
✅ A few more helpful tips
- Consider including a letter in your offer explaining reasons they should sell to you.
- If the foreclosure deadline is approaching, a fast close makes your offer more appealing.
- Work with an experienced agent to find good properties and negotiate mutually beneficial deals.
- You’ll also want a good attorney to run a thorough title check and ensure you don’t run into any nasty legal surprises down the road.
- Keep in mind, this seller is losing their home – so be kind!
Buying homes at Florida foreclosure auctions
⚡️ Key takeaways
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If the lender files a successful lawsuit to foreclose on a delinquent borrower, and the borrower does not repay their debt or declare bankruptcy within 20 to 35 days, the property will go to auction.
Auctions can take place in person or online, depending on the property and the county where it resides.
If no one submits a winning bid at the auction, the bank or government takes possession and sells it themselves on the open market.
Where to find Florida foreclosure auctions
Legally, auctions must be advertised for at least two weeks to the general public. This includes advertisements in the Real Estate or Classifieds sections of your local newspapers.
You can go to Sheriffsales.net to get a list of links to county websites where you can find upcoming auctions. Popular areas include:
Although these are options, it may be easier to search on sites like RealtyTrac. These sites will give you the location, date, and time of the auction.
You can also visit Floridapublicnotices.com to conduct a wider search for advertised auctions in Florida. Here are some tips on how to use the site:
- Select “Foreclosure Sale” under the Notice Type Tab.
- Narrow your search to the counties that interest you.
- You can also expand the date range if you would like.
- The search results will show you notices that have been published by newspapers that apply to your search criteria.
How to purchase a Florida foreclosure at auction
To buy at an auction, first you need to line up your financing. This can be your own funds, or you can borrow some or all of it from a friend, business partner, private investor, or hard money lender.
Ask your agent or other real estate professionals if they have any recommendations for the latter two options if that interests you. Online forums like Bigger Pockets might also point you in the right direction for locating financing.
If you qualify, you might even be able to obtain a high enough limit on a home equity line of credit (HELOC) to use for buying a house at auction.
Once you have your financing, contact the clerk of court for important details about the auction, including:
- Bid increments
- Date of auction
- Down payment amount
- Minimum bid
- Payment timeline
- Payment type accepted
👉 Before you bid:
- See if you can inspect the property: If you contact the trustee in advance, they might agree to let you do an inspection (more often, they won’t). Just know that all auctions are as-is sales.
- Have an attorney run a title check: You should run a title check in advance to avoid any issues with title transfers (also consider purchasing title insurance!).
- Decide maximum bid: Competition and emotions are dangerous elements in auctions, so determine the maximum bid you’re comfortable with in advance and stick to it.
You’ll bid in person or online depending on how that specific county conducts auctions — online auctions can be more convenient, but they might also draw more competition.
The days and times of auctions vary between counties, so you’ll need to check your county website to learn when the auctions will be held that interest you.
If you submit the winning bid, remember you are now responsible for the property and any tenants that come with it. Pay for the property in full within the required time frame (usually noon or 4 p.m. the following day, depending on the county).
⚠️ Be aware of Florida’s redemption period: Florida allows borrowers to repay their debts anytime leading up to auction and up to 10 days after the foreclosure sale is complete to regain ownership of their property. This means you could submit a winning bid at auction, pay for a house, and begin renovations only to have the original owner take the house back. We recommend you wait at least 10 days to do any work on a property purchased at auction to avoid this situation. |
✅ A few more helpful tips
- Most auctioned properties are bought sight-unseen, so bid conservatively.
- Many of these homes have been neglected or vacant for extended periods of time, so budget for repairs.
- Don’t assume you’ll have access to the property right away — wait at least 10 days before making repairs.
- Find out if there are tenants in the property. Investors must honor the lease from the previous owner, and owner-occupants must allow tenants at least 90 days to vacate the property.
» MORE: The Most Vacant Cities in America
Buying bank-owned foreclosures in Florida (REOs)
⚡️ Key takeaways
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In Florida, when a property doesn’t sell at auction, the lender takes possession and tries to sell the property themselves — this is called a real estate owned (REO) property.
The process of buying an REO is a lot like buying conventional homes, except you are buying directly from the bank rather than a person.
Getting good deals is still possible, but the bank is interested in getting as much money back on their investment as it can, so don’t expect a super deep discount on these.
How to find Florida REOs
Finding REOs in Florida is relatively simple. Begin your search on the local MLS and major real estate websites like RealtyTrac, Zillow, and Bankownedproperties.org.
Using key terms like “sold as-is,” “foreclosure,” or “lender owned” can also help narrow your search to locate these properties.
Unfortunately, there are fewer REOs than properties at other stages in the foreclosure process, so the competition will probably be keen. In quarter one of 2022, for example, there were only 673 total REOs available in all of Florida.[4]
The lower availability of these properties means there will probably be plenty of competition, which means good deals will be harder to acquire and negotiate.
To get a competitive edge, find a good real estate agent who can set up MLS alerts that notify you the instant a new REO hits the market in your target ZIP code(s).
💡 Quick tip: A good way to get the inside track on bank-owned properties is to establish a relationship with the REO department of local lenders. Banks are eager to get REOs off their books, so if you establish yourself as a credible, repeat buyer, they might come to you first before they list on the MLS. |
How to buy REO foreclosures in Florida
Once you identify the REOs you want to buy, the process is similar to any other home purchase: You and your agent will submit an offer, do an inspection, and negotiate terms.
You may or may not be allowed to use conventional financing, depending on the property’s condition. Sometimes you can get more flexibility or better terms financing through the bank listing the REO, but don’t count on this.
Standard closing fees are still required, and lenders generally have specific guidelines for these transactions, so be sure to follow instructions closely to avoid unnecessary delays.
⚠️ Consider an attorney and owner’s title insurance Sometimes lenders will only issue special warranty deeds for REO properties, as opposed to the general warranty deeds that are more common in conventional sales. Special warranty deeds only assure buyers that no encumbrances — that is, unpaid debts against the property — were acquired during the time the lender owned the property, but it does nothing to protect you from encumbrances from earlier. We recommend you consult an experienced attorney to protect you against issues with title if you are new to the process. |
✅ A few more helpful tips
- Be sure you have a letter of pre-approval before getting started — lenders won’t waste time on buyers they aren’t sure can pay.
- REOs probably aren't going to be the cheapest deal because lenders aren’t desperate to offload a property and want to recoup their investment.
- REO lenders have carrying costs, so the longer the property has been on the market, the more likely they'll negotiate with you.
- Avoid end-of-month closings because closing agents are super busy at this time.
- Work with an experienced agent and attorney to ensure your offer is submitted correctly to be seriously considered.
Buying HUD foreclosures in Florida
⚡️ Key takeaways
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HUD homes are like REOs in the sense that they didn't sell at auction and were repossessed by a lender. But, since HUD home mortgages were backed by the government, the government takes possession after foreclosure instead of a bank.
Since the HUD process doesn’t vary much by state, we won’t go into detail here (full guide coming soon!).
How to buy Florida HUD foreclosures
To find HUD properties, search on the HUD Home Store. You must use an agent registered to use HUD to submit bids, so be sure to verify your agent is approved.
HUD only cares about price: It evaluates bids on a rolling basis, and will always accept the highest bid at the end of a given day that meets the minimum purchase price for that property.
🏡 HUD prioritizes owner-occupant buyers: All HUD properties are initially only available to owner-occupant buyers for a set period before bidding is opened up to investors. This makes it a good option for retail buyers looking for an affordable home. On the flipside, the properties that make it to investor bidding are often fixer-uppers. |
Summary: How to buy foreclosure in Florida
In Florida, whether you’re buying a pre-foreclosure, foreclosure at auction, REO, or HUD home, there are a few things you need to do:
- Step 1: Determine your financing — If you want to buy a pre-foreclosure, REO, or HUD home in Florida, traditional financing may be an option depending on the condition of the property. If you want to bid at auctions, you’ll probably need the cash on hand — whether it’s yours or a private investor’s is up to you.
- Step 2: Search for your property — Check your local MLS and sites like Zillow or RealtyTrac for pre-foreclosures and REOs. You'll likely find auction homes on your county sheriff's website, while HUD homes are on the HUD Home Store.
- Step 3: Do your due diligence — Conduct a title search to ensure there are no outstanding liens or issues with the property. If possible, get an inspection and appraisal. While not required in Florida, working with an experienced attorney and/or agent will be very helpful here.
- Step 4: Make an offer or bid — In the pre-foreclosure stage, be respectful of the people you’re dealing with. For an REO or HUD home, be sure you’re carefully following the specific instructions for that kind of home.
- Step 5: Close on property — If you acquired the property at auction, remember not to assume the deal is complete until the sale has been confirmed and the redemption period is over. In Florida, wait at least 10 days after the sale is complete to begin renovation.
- Step 6: Move or rent — Congratulations! Move in and enjoy your new property — unless there’s a tenant in place. Then you need to give them at least 90 days to move out. If you’re a landlord, you need to honor the terms of their lease.
If you’re ready to find your next real estate deal, find an agent with foreclosure experience who can start finding you deals now!
FAQs about buying foreclosures in Florida
In Florida, lenders file a lawsuit against delinquent borrowers who are behind on payments. Usually, these borrowers have missed at least three or four consecutive payments on their mortgage. If the court grants the foreclosure, then a foreclosure auction will be scheduled 20–35 days later and the property will be sold at auction (unless the borrower pays their debt or declares bankruptcy before the auction date).
Buying a pre-foreclosure is a lot like buying conventional homes — you locate a property, submit an offer, negotiate terms, and close. The major difference is these sellers are financially distressed, they may be resistant to negotiation, and they may be operating on a compressed timeline to avoid foreclosure. Learn more about how to find pre-foreclosures.
All foreclosure auctions are required by law to be advertised to the general public; they are listed in the Real Estate or Classifieds sections of local newspapers. You can also search for other types of Florida foreclosures by going to sites like RealtyTrac or Zillow and using the “foreclosure” filter to narrow your search results.
Recommended Reading
Sofi.com. "Foreclosure Rate for 50 States." Accessed May 19, 2022. Updated May 16, 2022.
RealtyTrac.com. "Foreclosures." Accessed May 19, 2022. Updated May 19, 2022.
attomdata.com. "U.S. Foreclosure Activity Sets Post Pandemic Highs in First Quarter of 2022." Accessed May 19, 2022. Updated April 21, 2022.