Purchasing a Home in Pre-Foreclosure

One way to get a great deal on a home or investment property is to purchase a home that’s in pre-foreclosure. Pre-foreclosure is when the owner has defaulted on their mortgage. In other words, they haven’t made payments in several months. For some homeowners in default, you may be doing them a favor by purchasing the home and selling the property may avoid the owner from facing foreclosure.

There are many ways to find pre-foreclosures. My least favorite, and which I dont suggest you "ever" do is by checking with your local county courthouse and then going to the house or sending letters to the person facing foreclosure. The "notice of default" is a public notice and you will find notices of people who are unable to pay their mortgages and/or taxes. Some real estate investors will drive by the properties to see if they’re up to standards and then approach the homeowners by knocking on thier doors or waiting for them to come outside.

Since there are so many realtors that work with homeowners that are willing to short sale the property, it is the most inevasive method in obtaining a home in pre-foreclosure. The realtor will work directly with the seller and the lender. By working with both the bank and the homeowner, the realtor can strike a deal that will make everyone happy. You’ll get a great deal on a home and the homeowner will avoid foreclosure. The bank will also be happy not to have to pay for the legal proceedings of foreclosure and cheap sale of the property.

When choosing pre-foreclosure properties, you need to make sure that you get the best product for your money. Make sure to walk through the house and see what kind of condition it’s in. In addition, you should have it inspected to make sure it’s in good repair.

Many people who are in pre-foreclosure are in so much financial trouble that they can’t make necessary repairs. However, you need to keep a running tab of what repairs need to be made. Then you can use that cost to negotiate the price with the homeowner and the lender.

Overall, buying a pre-foreclosure can provide you with a nice home for a great deal. Unlike foreclosure auctions, there’s usually not a whole lot of competition when it comes to buying a pre-foreclosure home.

While it does take a little more leg work, purchasing a pre-foreclosure can help you to save tens of thousands of dollars on the cost of your home. If you’re looking to for a great deal, this may be the way to go.