When it comes to buying in pre-foreclosure vs. a regular sale, your chances of getting a great deal from a homeowner facing foreclosure depend on the specific situation.
When it comes to buying in pre-foreclosure vs. a regular sale, your chances of getting a great deal from a homeowner facing foreclosure depend on the specific situation. You may believe that owners of a home in pre-foreclosure are eager to negotiate, but that is not always the case.
When homes are in pre-foreclosure, it means the owners have missed a payment or two on their mortgages and the home is scheduled to be foreclosed. You may think the best time to approach a homeowner about purchasing his or her home is when the home is in pre-foreclosure. You might reason that the homeowners probably don't want to go into foreclosure and would therefore be open to discussing deals. The reality is, the pre-foreclosure period is an extremely difficult time for homeowners, both financially and emotionally. It's quite possibly the worst possible time to approach them about buying their homes. During the pre-foreclosure process, it's not clear to outsiders if homeowners are trying to sell their homes or trying to save them.
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Before approaching a homeowner, find out if they're even interested in selling. Even if they might not be interested initially, they may be more open to a conversation if the financial situations worsen a bit further down the road. The best way to inquire about a pre-foreclosure sale is to send the homeowner a postcard or letter that states your intention. If the homeowner is working with a real estate agent, he or she can have the agent contact you.
If you're debating buying homes in pre-foreclosure vs. a regular sale, you will find it's tougher to locate pre-foreclosure properties. This is because most homes in pre-foreclosure aren't listed yet. Real estate websites like Zillow.com post preforeclosure information shortly after it becomes available, so you can look to these sites as an invaluable resource. Notices of Default and Notices of sale are required to be published in local newspapers. You can check the newspapers in the areas in which you want to buy for these notices.
Another thing to consider when debating between buying a home in pre-foreclosure vs. a regular sale is that when you buy a home in pre-foreclosure, once the sale goes through, you'll be responsible for any liens on the property. Before you put an offer in on a pre-foreclosure, make sure you do a title search to check for liens. You don't want to discover any costly surprises after the fact.
Additionally, some homes in pre-foreclosure are being sold via short sale, which is when the lender has agreed to accept a sale price that is much lower than the mortgage balance on the home. Short sales are a result of the real estate value dropping after the homeowners bought the property. If you buy a home through a short sale, both the homeowner and the lender must accept your offer.
If you've made contact with the homeowners and they're open to talking about a possible sale, make yourself available as soon as possible. Schedule a walkthrough of the property with a contractor so that you can spot trouble spots and figure out how to price your offer. Don't be afraid to negotiate, but be aware that the homeowner is also trying to settle as much debt as possible. You should also realize that at any time during the pre-foreclosure process, the homeowners could pay their missed payments and save the house.
A real estate agent can help you find and make an offer on a home in pre-foreclosure or a home in a regular sale. If you need an agent today, to go Reply! to connect with professionals in your area.