Pre Foreclosure?

Question

There is a home around the corner that is listed on RealtyTrac as "Pre-Foreclosure". I would love to buy it but have never bought a forclosure .....or a home for that matter. How do I find out info on it? How can I get the best deal? Any advice will be helpful.
Thanks!

Answer 1

"Pre-Foreclosure" simply means that the owner is probably behind on their payments and is desperate to sell. It means that they're probably open to any offer, reasonable or not.

There's nothing unique about buying a home in "pre-foreclosure" status or even that has already been forclosed. If you're satisfied with the condition of the property and get it at a price you're comfortable with, go for it.

Answer 2

Pre-forclosure means the buyer has defaulted on the terms of the loan (usually by falling behind on payments) and the bank has formally started the foreclosure process.

If you wish to buy this property, you need to determine how much is owed (mortgage / deed of trust, tax liens, HOA dues, mechanics liens, etc.) If the existing debt is less than you are willing to pay for the house (not all foreclosures are under water), then purchasing it will be simple--if the current owner wants to sell.

On the other hand, if the existind debt exceeds the amount you are willing to pay--and if the current owner is amenable to it--then you will need to negotiate a "short sale" with the lender.

Of course you could always attempt to but the property on the courthouse steps when it goes to auction, or even wait until the bank takes the property back (assuming no one buys it at auction and the current owner doesn't cure the default) and but the property as REO (Real Estated Owned by the bank).

Buying foreclosures is not as simple as it sometimes seems.

Answer 3

Do the owners still live there? If you know them and can contact them just tell them you like their house and would they be interested in selling it? You'll have to go from there but often people don't want to talk about it and too frequently more is often owed on the property than it is worth in today's market.

If you can't contact the owners then find out from public records all you can. If you locate the lender then see if you could make an offer on it. But, foreclosures are not easy simply because you don't have enough information to proceed.

Answer 4

Do you know the people in the property? Is it listed? Get yourself qualified by a lender and that means approved not pre-approved! You will need to be ableto close perhaps quickly on the other hand..The lenders sometimes take their time trying to decide what they will do so also have some patience. Visit with a mortgage broker to get the money in place first. Then talk to the owners or REALTOR to make an offer. Good Luck!