Pre-foreclosures - Why Real Estate Gurus Prefer Them
Most people in the US are aware of the current real estate crisis and the unsettling fact that many people are losing their homes to foreclosure. Before a home is in the process of becoming foreclosed, it is in the pre-foreclosure stage. The pre-foreclosure period can last anywhere from a few weeks to a few months, and is considered by many real estate investors as the absolute best time in which to negotiate the purchase of a home.
A lot of times the banks don’t want to deal with having to foreclose a home, so they will allow the owners to sell it during the pre-foreclosure period. You can get a great bargain in buying a pre-foreclosed home.
Here are some of the reasons many real estate professionals prefer purchasing a pre-foreclosed properties rather then waiting until they reach foreclosure:
- A pre-foreclosed home could actually be cheaper because you are dealing one-on-one with an owner who desperately wants to avoid 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. Foreclosures attracts more of the mass real estate market then pre-foreclosures do.
- More time to consider your finances before making the decision to purchase a home.
- Auctions can be either overwhelming or lead to egotistical or emotional decisions.
- You can bring an inspector along with you to inspect a pre-foreclosed home.
- All you’ll need to buy a pre-foreclosed home is a down payment for as low as a few hundred dollars. At a government auction you would need more cash up front.
Always check to make sure that the pre-foreclosed home you’re interested in has no liens or judgements against it. You should also bring along someone to inspect the home for you so you’ll know of any problems. The risks in purchasing a pre-foreclosed home are similar to purchasing a home the traditional way, only a lot less expensive.
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