Buying Foreclosures in Florida in 2022 [Expert Guide]

Prime Florida real estate markets, such as Miami and Fort Lauderdale, have witnessed significant investor activity over the last few years. In fact, rising home values, a booming economy and lots of migration from other states have all resulted in several Florida cities being identified as top locations for real estate investment in 2022. 

As such, demand for foreclosures has been rising in the state, as these are often excellent candidates for both fix and flips and the BRRRR method.   

So in order to help investors navigate how to buy a foreclosure in Florida, we’ve written this guide that talks you through your options.

The current state of the foreclosure market in Florida 

The federal foreclosure moratorium that was implemented in response to the pandemic severely restricted the supply of foreclosures across the country. The Supreme Court finally ended the moratorium at the end of August 2021, and since then the market has been gradually returning to normal, although with courts experiencing huge backlogs, we’re still not yet back to business as usual.

However, having said that, the foreclosure rate in Florida has been among the highest in the country since the end of the moratorium. In both October and December of last year, Florida was reported to have the second highest foreclosure rate in the country.  

According to research by SoFi, the Florida countess with the most foreclosures in December 2021 were Levy, Hamilton, Holmes, Broward and Osceola. 

Buying a pre-foreclosure property in Florida 

Buying a Florida home during pre-foreclosure means the period of time between the homeowner receiving a notice of default (NOD) and the property being foreclosed. 

In Florida, it can take 10 to 12 months from the date of the first missed payment, to the lender repossessing the property. This provides investors with plenty of opportunities to purchase directly from a homeowner during the pre-foreclosure stage. And of course, getting in and negotiating a sale before a foreclosure hits an auction can result in a far more favorable deal for the investor.

There are plenty of middlemen (both individuals and companies) operating in Florida, who identify pre-foreclosure opportunities and then connect buyers and sellers in exchange for a fee. This includes national outfits such as Foreclosure.com as well as smaller local wholesalers. 

While a pre-foreclosure can represent a very good opportunity, it is also vital to remember that the buyer might be liable to pay outstanding mortgage payments. So confirm if there are any liens to pay before committing to the sale. 

Buying a foreclosure at auction in Florida 

Once the pre-foreclosure period has been completed, the home will make its way to foreclosure. At this point, the property will go to auction to be sold. When real estate is sold at a public auction in Florida, it’s a legal requirement that the action is publicly advertised, such as in local newspapers and online.

Many county clerks of the courts’ websites provide an online tool where you can view all foreclosures going to auction. For example, here’s the search tool provided by the Miami-Dade Clerk of the Court website. However, once you find a foreclosure you’re interested in, check the listing regularly, as auction dates are often postponed at short notice due to legal wranglings between the homeowner and the lender.   

Also, during the period of time between finding a good listing and the auction date, you must perform your due diligence (or as much as is possible). As well as ticking off the basics such as checking for additional liens and encumbrances, it’s highly advisable to do a drive by of the property. This is especially important if you’re unfamiliar with local Florida markets, as not only will this reveal the external condition of the home, but also what the neighborhood is like.   

Buying a REO foreclosure in Florida 

For any foreclosures that don’t sell at auction, they can then go on to a Real Estate Owned Sale (REO). In this scenario, the property is still on the lender’s balance sheet and they are generally pretty keen to get it off their hands and recoup their losses as soon as possible, which means buyers can get a steep discount.

However, there is usually a very good reason why no investors made an offer during the auction. This is especially the case in the competitive Florida foreclosure market - investors don’t miss good deals at auction. 

Therefore, if you’re considering going down the REO route in Florida, be aware that many the homes on offer will probably require substantial work. So complete thorough due diligence and seek advice from experts, such as a private money lender who can assess your after repair value (ARV) calculations to determine how feasible this is.   

Securing funding for a foreclosure

Whatever route you go down to buy a foreclosure in Florida, you will need quick access to finance to pay for the deal. Here at We Lend LLC, we provide private money loans throughout Florida

Our simple 4-step process can approve and fund your purchase within 3 to 7 days, ideal for investors buying foreclosures at auction. What’s more, there’s no upfront fees, and no bank statements or tax returns are required. 

To find out more, speak to one of our advisors today.