What are Pre Foreclosure Homes?

The sad reality is that thousands of Americans lose their home to foreclosure each year.  There is a variety of reasons why foreclosures occur such as lenders that do not do a thorough job in checking someone’s ability to make the mortgage payments, some people simply do not care to make the payment and many have suffered to the current status of the economy.  Whatever the case may be, when someone is behind in their payments, they will be included in the list of pre foreclosure homes for sale.

The Pre Foreclosure Process

What is pre foreclosure homes process?  In the beginning, the lender files a public notice of default, which initiates the process for foreclosure.  It is at this point in time when a home is officially entered into the pre-foreclosure stage.  This is somewhat similar to a grace period where the homeowner is given a warning of the default and they need to take care of the matter immediately.  The grace period for the homeowner varies state to state, but it is typically six months time, however, many states do have a shorter time frame.  There are several ways a homeowner can prevent their home from advancing to the final stage of foreclosure.

Buying From the Homeowner

The homeowner can sell the house before it goes into foreclosure.  If they are absolutely unable to make the payments or catch up on the past due payments, this is an option that will prevent them from having a foreclosure on their credit.  Buying pre foreclosures homes is often beneficial to both the buyer and the seller.  Pre foreclosure homes for sale can be bought fairly cheap, as the majority of homeowners will sell the property for what they owe on it as opposed to the market value.

Where to Find Pre Foreclosures

If you would like to buy a home in pre foreclosure, it is important you know how to find pre foreclosure homes as well as how to buy pre foreclosure homes.  Many of these homes can be found through searching local newspaper listing or searching on the internet. Real estate offices also will have listings for homes that are being foreclosed.  If you wait to purchase a home that has already been foreclosed, you will have to go to a sheriff’s sale.  When you purchase from this type of sale, in most cases you will not have an opportunity to view the inside of the home before you buy it.  For this reason when you can find them in the pre foreclosure stage, it will be to your benefit in a variety of ways.

Paying For the Property

Researching property investment tips is a great way to learn the process of buying pre foreclosure homes.  The process is typically done the same as purchasing any property in most cases; however, there are some lenders that will only sell a foreclosed home on a cash only basis.  This does not mean that you have to have a few hundred thousand stashed under the mattress; it simply means you will need to take out a loan from another lender to pay the lender on the home.

Know What You Are Buying

If you are familiar with the Forex investment trading, you are aware of the risks involved in it, buying pre foreclosure homes is similar in the matter of risks if you do not know what you are buying.  Always have the home inspected before making an offer to determine if the final price will indeed be a bargain.  A large amount of foreclosed homes have been mismanaged and not taken care of.  They may have been left unoccupied for long periods of time, which can cause pipe, electrical and structural damage.  Always do a complete check on the property location, the market value and get an inspection before signing the papers.