Many people have never heard of a pre-foreclosure. A pre-foreclosure is a property that may go into default soon, but have not yet defaulted, and it is in the final stage before they are taken back by the bank. In other words, this means that the homeowner is still in controls of the property, but if they do not do anything to fix their situation the bank is going to repossess the home. Many benefits go along with purchasing pre-foreclosures. Many people miss out on these homes because they have no clue what they are, that they even exist, or how to go about finding them.
The primary reason to look into purchasing a pre-foreclosure is the price. Since the homeowner is motivated to sell the house before the bank takes it back, they will be more inclined to listen to any offers that they receive. Because of this, it is not out of the realm of possibility to find homes that are up to half off of the market value.
A significant advantage of pre-foreclosures is that you will also be able to deal directly with the owner. Working with the homeowner is an advantage because the buyer is in the driver’s seat during a pre-foreclosure deal. If the homeowner turns down your offer and fails to sell the property to someone else, they may end up losing everything. But the homeowner knows that if they sell the home, they can at least end up making back a little bit of money. Finding pre-foreclosures can be done in the same way as locating houses that the bank already owns. You can find them in the online, in newspapers, or by calling the bank directly. The way you discover them is a personal preference, and you can base it on what seems to be most natural and most effective.
When you buy pre-foreclosures, you will not have as much competition as you would when searching out foreclosed properties. This lowered competition helps to get a reasonable price and ending up with the home that you want.