Due to the recent real estate collapse, many people across the United States are losing their homes to foreclosure. The period of time before the official foreclosure is called pre-foreclosure. Depending on the state the pre-foreclosure period lasts from seven days to a 60 days. Real estate experts know that the pre-foreclosure period is a great time to purchase a home.
Many of the 'for sale by owner' signs that you see are from owners that are in pre-foreclosure. The bank usually allows the homeowner time in which to try and sell their home before it is foreclosed. This is common because the bank is not in the real estate business and would prefer the current owner sell the home to cut their losses rather then having to seize the home themselves.
Many Realtors agree that buying a pre-foreclosed home is an excellent idea. Here are many advantages to buying a pre-foreclosed home from a homeowner rather than a foreclosed home at a government auction:
- Pre-foreclosed homes are sold for less than foreclosed homes. A homeowner will sell their pre-foreclosed home for low cost so they won?t have to face foreclosure.
- Since you won?t be at an auction, you will be given more time to talk to the home owner about any questions you may have concerning the house.
- Typically less competition then at a foreclosure auction where there is multiple bidding for the same property. Foreclosures attracts more of the mass real estate market then pre-foreclosures does.
- More time to evaluate financial scenario then at an auction.
- You will be given more time to access and evaluate your finances before buying a pre-foreclosed home.
- You can bring an inspector along with you to inspect the pre-foreclosed home. You will be given more time to have it looked over.
- 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!
Make sure you bring along an inspector when you check out a pre-foreclosed home. You should also check to make sure there are no past judgement liens or unpaid taxes on the property. The risks in buying a pre-foreclosed home are about the same as buying a home the traditional way through a real estate company, but there are a lot more advantages! You can even buy a pre-foreclosed home and then resell it for twice as much!
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