Pre-foreclosure Versus Foreclosure - Pros of the ‘Pre’
It’s unfortunate but foreclosed homes currently represent half of all of all the homes sold in the US. Before the bank forces foreclosure there is in a period called pre-foreclosure which can last anywhere from two to twelve weeks. Many of the real estate gurus have made a fortune on pre-foreclosures and consider it as one of the best, if not the best, way to invest in real estate.
Many of the ‘for sale by owner’ signs that you see are from owners that are in pre-foreclosure. The bank usually allows the homeowner time in which to try and sell their home before it is foreclosed. This is common because the bank is not in the real estate business and would prefer the current owner sell the home to cut their losses rather then having to seize the home themselves.
Here are several reasons that real estate experts feel it?s a better idea to purchase a home during a pre-closure period instead of waiting to buy a foreclosed home at a government auction:
- Pre-foreclosed houses are often times cheaper considering it?s being sold by a home owner that is in a hurry to sell it before facing foreclosure.
- Because you are working with the owner you’ll be able to ask questions about the property you wouldn’t be able to otherwise.
- Typically less competition then at a foreclosure auction where there is multiple bidding for the same property. Foreclosures attracts more of the mass real estate market then pre-foreclosures does.
- More time to evaluate financial scenario then at an auction.
- You will be given more time to access and evaluate your finances before buying a pre-foreclosed home.
- You can bring an inspector along with you to inspect the pre-foreclosed home. You will be given more time to have it looked over.
- You will be allowed to make a low down payment on a pre-foreclosed house. At a government auction you would be required to pay the total amount in cash.
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.
Tags: bank foreclosures, bank mortgages, bank pre-foreclosues, business opportunity, Foreclosure, foreclosures, government auctions, investing, pre-foreclosure, pre-foreclosures, property auctions, real estate short sales, Reality, seized property
