If you’re like me, you’re looking to buy a new home. I mean, who can resist in this market? If so and you’re on a limited budget, you may most likely join the masses and use the Internet to begin researching area foreclosures. The sale of foreclosed properties has been on the rise for several months and is expected to maintain steady for a while. This is due in part to two factors, increased inventory and reduced prices. Somewhere in the mix of true bank owned properties, you may find homes for sale that are in the pre-foreclosure stages. As you can likely gather from the name, these properties are headed for foreclosure, but not quite there yet.
Some pre-foreclosure properties are listed available for sale online with a local financial institution or a real estate agent. These may appear on foreclosure listing websites as well, 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 for sale themselves. I’ve often found opportunities listed on Craigslist or Backpage as well.
One of the many pros to buying a pre-foreclosure that is listed through a real estate agent is communication. You will be in direct and constant communication with the real estate agent during the entire process. This may give you more comfort and peace of mind during the transaction. It’s no secret that homeowners facing foreclosure are generally angry and upset. You can discuss the property and talk freely with the real estate agent in charge of the listing, but without having to worry about angering or offending them.
The biggest downside to buying a pre-foreclosure through a real estate agent is the selling price. Real estate agents take a percentage of each sale as their form of compensation. To ensure they get a decent paycheck, the price of the home is often increased. However, a great agent will understand that it’s more important to move the home when there’s a lack of interest in the property. While pre-foreclosure homes, even represented by an agent, are still cheap but you may get a better deal when buying directly from the homeowner as they have significant motivation to sell.
Speaking of buying directly from the homeowner, there are a number of benefits in 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 an even better deal. All that really matters is that the mortgage lender gets the final agreed upon settlement.
As previously mentioned, 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 as it may kill the deal.
In addition to buying a pre-foreclosure direct from the homeowner, you may want to do a little bit of research. There are millions of homeowners facing foreclosure at this moment. Some of those homeowners do not know all of their available options. You can approach a homeowner yourself and inquire about buying their home. You can also research foreclosure records online or in local government offices. To get started, it’s recommended that you send correspondence through the mail. This is considered less rude and invasive, and allows the homeowner to digest the information. If you hear back, excellent! If not, you may want to try again in another month or so.
As with everything, it all starts with action. No action, no results.