Pre-foreclosure Versus Foreclosure - Pros of the ‘Pre’
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 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.
- There will probably be less competition for a pre-foreclosed home than a foreclosed home at an auction. You won?t have to worry about placing the highest bid.
- You will be given more time to consider your finances before making the decision to purchase a pre-foreclosed home.
- You will be given more time to access and evaluate your finances before buying a pre-foreclosed home.
- You have more time to have a pre-foreclosed home inspected than you would at an auction. You will be aware of any potential problems the house may have.
- 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 the entire amount in cash.
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 it may have. The risks in purchasing a pre-foreclosed home are similar to purchasing a home the traditional way, only a lot less expensive! You can even resell the pre-foreclosed home for more money than you purchased it for.
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