Due to the recent real estate collapse, many people across the United States are losing their homes to foreclosure. The period of time before the official foreclosure is called pre-foreclosure. Depending on the state the pre-foreclosure period lasts from seven days to a 60 days. Real estate experts know that the pre-foreclosure period is a great time to purchase a home.
Many houses that are ‘for sale by owner’ are houses that are in a period of pre-foreclosure. The lenders sometimes allow the homeowners to try to sell their home before foreclosing it. The banks are not in the real estate business themselves and would rather the owners sell the home instead of (the lenders) having to foreclose it.
Here are some of the reasons many real estate professionals prefer purchasing a pre-foreclosed properties rather then waiting until they reach foreclosure:
- Pre-foreclosed houses are often cheaper considering as it’s being sold by a home owner that is in a hurry to sell to avoid facing foreclosure and the bad credit that goes along with it.
- Since you won’t be at an auction, you will be given more time to talk to the home owner about any questions you may have concerning the house.
- Typically less competition then at a foreclosure auction. Foreclosures attracts more of the mass real estate market then pre-foreclosures do.
- More time to evaluate financial scenario then at an auctioned property.
- Many people can become more emotionally driven during bidding and pay more then they had intended to.
- You can bring an inspector along with you to inspect a pre-foreclosed home.
- You will be allowed to make a low down payment on a pre-foreclosed house. This is not the case at a foreclosure auction.
As with any house purchase make sure you check for any judgements, or liens against the estate. Bring along someone how is familiar with buying real estate and if possible have the house professional inspected. The risks are comparable to a traditional type of home purchase but with the advantages of foreclosure discounted pricing.
Sorry, the comment form is closed at this time.