The term ‘pre-foreclosure’ is currently in trend if I may say so. The real estate market is as such right now that foreclosures are pretty much listed in the ‘recent happenings’. The newspapers, magazines, internet and even your relatives will have all the possible gossip on foreclosures. While some are facing it due to divorce and other personal reasons, some might face it due unwillingness to pay.
What exactly does ‘Pre-Foreclosure’ mean?
Foreclosures as we all know is the locking away of property due to the inability of the owner to pay the mortgage due to personal reasons or business loss, or any reason that prevents him form meeting his mortgage obligations. However, pre-foreclosure is the calm before the storm. How? Well , pre-foreclosure is when the property of the owner is listed as delinquent and its is only a matter of time, before the owner loses the property due to foreclosure. Putting it in simpler words pre-foreclosure means the owner has failed to do what the law requires him to do and thus has to face foreclosure as a consequence. Which means the house will soon be taken into the custody of the lender.
The Brighter Side of Pre-Foreclosure- How it Benefits Real Estate Investing
If you are looking to invest in real estate or you want to buy a home, pre-foreclosed properties have an advantage. The property during the term of pre-foreclosure is sold at a price that is 40 percent lesser than its actual market price and would be sold faster than that under foreclosure. The owner is more than happy and in a hurry to sell this property so as to cover up his loss of money and to save him from credit damage of a foreclosure. You can take advantage of this.
The property under pre-foreclosure is sold in the very same condition that it was seized in and you can make any changes can be made after the new deal has been sealed. Although, before buying, you can inspect the property which may not be the case in foreclosure. Once the property is bought at a low price keeping in mind the benefit of it being a pre-foreclosure deal, you have the advantage of selling it when the real estate market is at its peak. Since buying property and wanting homes will always be a rising need, your profit by selling this property will definitely be substantial.
Another benefit is that you can negotiate the prices with the seller when purchasing a pre-foreclosure property as against purchasing a foreclosure or traditional property.
Worried About the Condition of Pre-Foreclosed Property?
As I mentioned earlier, a property under pre-foreclosure is sold in an ‘as-is’ condition. But that does not mean that the property will necessarily be a bad condition. It is possible that only some basic repairs are needed that may not cost you much. In fact, such repairs may actually make the home look more becoming and fetch you higher prices, making the deal even more profitable.
Buying Pre-Foreclosed Property
The buying process of pre-foreclosures is simply by checking the default list. After checking you can directly contact the owner and if the property has been put on sale you then check with the listing agent about your next course of action. It is favorable to contact the owner first and leave them a hint or gist of your interest in buying the house and willingness to discuss the other conditions. The listing agent better known as the real estate agent then helps the owner with the selling of the property.
The Online Factor in Pre-Foreclosure Property Hunt
Now, there are websites available that indicate and help you locate down pre-foreclosed property when it is in the early pre-market status as one might say. This clearly means that the bank has already initiated the process to foreclose the property, but the home is not yet listed for sale. This information was very difficult to get previously because it was kept hidden from the general public by services that require membership fees.
These sites take up to two days to give you a feedback and update you with the status of the pre-foreclosed property you chose. However, you can remain assured they have the best deals at hand. This aspect of website search for pre-foreclosed property is a blessing for the professional investors as they already have great knowledge and then these sites make it a cake walk for them to access such property before the general public finds out.
The online feature is of great help because it helps you filter your search and limit it to only pre-foreclosed property and not cluttering your screen with other deals. This saves time and effort and doesn’t have you walking miles and miles or hopping from one place to another in order to check out the pre-foreclosed properties for investment.
Truly pre-foreclosures offer a world of hidden gains. Don’t miss of on benefiting from them.
