Project Stocks

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 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.

Here are many advantages to buying a pre-foreclosed home from a homeowner rather than bidding on a foreclosed home at an auction:

- Pre-foreclosed houses are often cheaper considering as it’s being sold by a home owner that is in a hurry to sell to avoid facing foreclosure and the bad credit that goes along with it.

- You will have the opportunity to ask the home owner questions concerning the home.

- There is usually less competition for a pre-foreclosed home than a auctioned foreclosed home. You won’t have to worry about placing the highest bid.

- More time to evaluate financial scenario then at an auctioned property.

- Auctions can be a skill in itself and many people are not comfortable in that environment.

- You can bring an inspector along with you to inspect a pre-foreclosed home.

- All you’ll need to buy a pre-foreclosed home is a down payment for as low as a few hundred dollars. At a government auction you would need more cash up front.

Always check to make sure that the pre-foreclosed home you’re interested in has no liens or judgements against it. You should also bring along someone to inspect the home for you so you’ll know of any problems. The risks in purchasing a pre-foreclosed home are similar to purchasing a home the traditional way, only a lot less expensive.