Why Pre-foreclosures are Preferred with Real Estate Pros
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.
Many houses that are ‘for sale by owner’ are houses that are in a period of pre-foreclosure. The lenders sometimes allow the homeowners to try to sell their home before foreclosing it. The banks are not in the real estate business themselves and would rather the owners sell the home instead of (the lenders) having to foreclose it.
Here are several reasons that real estate experts feel it?s a better idea to purchase a home during a pre-closure period instead of waiting to buy a foreclosed home at a government auction:
- Pre-foreclosed houses are often times cheaper considering it?s being sold by a home owner that is in a hurry to sell it before facing foreclosure.
- You will be given good opportunities to ask the home owner questions concerning the home.
- You won?t have to worry about things becoming hectic like they would at a government auction.
- More time to evaluate financial scenario then at an auction.
- Auctions can be either overwhelming or lead to egotistical or emotional decisions.
- Less risk of potential problems because you can get a good look at the house ahead of time, and in some cases have it professionally inspected.
- You don’t need all the cash up front like you would at an auction. You can pay a down payment for as low as a few hundred dollars!
As with any house purchase make sure you check for any judgements, or liens against the estate. Bring along someone how is familiar with buying real estate and if possible have the house professional inspected. The risks are comparable to a traditional type of home purchase but with the advantages of foreclosure discounted pricing.