Homebuyers: The Pros and Cons of Pre-Foreclosure Sales

Homebuyers: The Pros and Cons of Pre-Foreclosure Sales

Are you looking to buy a new home? If so and if you are on a limited budget, you may use the internet to research foreclosures. The sale of foreclosed properties is on the rise, due to their affordable prices. Somewhere in the mix, you may find homes for sale that are in the pre-foreclosure stages. As you can likely gather from the name, these are properties that are headed for foreclosure, but not yet there.

As stated above, some pre-foreclosure properties are listed available for sale online. These may appear on foreclosure listing websites, but not always. There are two main ways in which pre-foreclosures are sold. A real estate agent is used or the current homeowners list the home as for sale by owner. As for who you should do business with, it depends on your own personal preference.

One of the many pros or plus sides to buying a pre-foreclosure that is listed through a real estate agent is communication. That real estate agent is whom you will have direct communication with. This may give you comfort and peace of mind. It is no secret that homeowners facing foreclosure are angry and upset. You can discuss the property and talk freely with the real estate agent in charge of the sale, but without having to worry about angering or offending them.

The biggest con or downside to buying a pre-closure through a real estate agent is the selling price. Real estate agents take a percentage of each sale. To ensure they get a decent paycheck, the price of the home increases. While pre-foreclosure homes, even in these types of cases, are still cheap, you may get a better deal when buying directly from the homeowner.

Speaking of buying directly from the homeowner, there are a number of benefits to doing so. One of those benefits is the deal that you may be able to walk away with. At the last minute, some homeowners will do just about anything to sell their homes before foreclosure starts. Selling a home allows a homeowner to keep their credit in good standing. This means that you may be able to negotiate a better deal. All that really matters is that the mortgage lender gets their agreed upon share.

As it was previously stated, many homeowners are dealing with a wide array of emotions when faced with foreclosure. You may see this in the form of uncertainty. A homeowner may want to try and put-off the buying process as long as possible. Deep down, all homeowners wish for a last minute reprieve that will allow them to keep their properties. If you want to buy the property, make your intentions known, but do not be too pushy.  

In addition to buying a for sale by owner pre-foreclosure, you may want to do a little bit of research. There are millions of homeowners facing foreclosure. Some of those homeowners do not know all of their options. You can approach a homeowner yourself and inquire about buying their home. You can research foreclosure records online or in local government offices. To get started, it is recommended that you send correspondence through the mail. This is considered less rude and invasive. If you hear back, good. If not, you may want to try again in another month.

Homebuyers: What You Need to Know About Foreclosures

Are you looking to buy a new home? If you are, you may examine the online websites of real estate agents or pick up copies of their printed brochures. Of course, this is a great way to find and buy a new home, but there is another step you may want to take. That step involves reviewing foreclosed properties available for sale. In a time where foreclosures are on the rise, you may be surprised just how affordable they are to buy.

One of the most common questions asked by perspective buyers is what causes a property to enter into foreclosure. Typically, there is nothing wrong with the property itself. In fact, the current or previous homeowners may have taken great care of it. Foreclosures occur because of financial difficulties. These difficulties may include an injury that prevents someone from working, being terminated or laid off, excessive debt, or divorce.

If you are interested in buying a cheap home, one of the best approaches to take is to negotiate directly with the current homeowners. In many states, this is possible before the foreclosure proceedings get underway. In this case, the home is in a pre-foreclosure stage. As this point in time, homeowners facing mounting debt can try to sell their homes. And, you will find that many want to. You may be able to get a great deal. It depends on the current balance owed on the mortgage, as well as the amount of money the homeowner needs to relocate.

Homeowners trying to sell their homes while in the pre-foreclosure stages will often advertise their home is available for sale online or in newspaper inserts. A significantly reduced home is a good sign that the homeowner is facing foreclosure. You also have the option of approaching those facing foreclosure independently. Information for doing so can be acquired online or in local government offices, as foreclosures are public notice. Approaching a homeowner in financial trouble may work to your advantage, but many consider it be a risky and immoral approach.  

After a home has been foreclosed on, many banks will try to find a new owner right away. This is often done through an auction. This auction often occurs at local county office buildings or at the lending institution. Foreclosure auctions are often considered one of the best ways to get an amazing deal on a home, but you, as a buyer, may be faced with multiple rules and restrictions. You may need to have the money upfront or at least proof of required funds, as most auctions do not allow loans. You also rarely get the opportunity to see the property in question or inspect it. This means that you are not only buying the property as-is, but you are buying it blindly.

Before deciding to buy a foreclosed property, it is important to review all state laws pertaining to foreclosures. Learn as much as you can about the proceedings. For example, certain states have what are known as redemption laws. This, essentially, gives a borrower time to make good on their loan payments. If you are unaware of these or other similar laws, you may find yourself in a pinch. Why? Because even after you have successful won a foreclosure auction, the borrowers can reclaim their home if they can rectify their delinquent payments.  

Finally, know that if you purchase a foreclosed property, whether you do so through a real estate agent, directly through the bank or at a foreclosure auction, you are required to evict all current occupants. Many individuals actually find this difficult, on both physical and emotional levels. If you foresee a problem, such as if the tenant or previous owners are already making it known that they will not move, you should seek professional assistance. This assistance should come from local authorities or a well-known and reputable lawyer, namely one who specializes in real estate or foreclosures.