Why Pre-Foreclosures Are Preferred By Real Estate Pros

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 to purchase a home during the pre-foreclosure period instead of waiting to buy a foreclosed home at a government auction:

- A pre-foreclosed home could actually be cheaper because you are dealing one-on-one with an owner who desperately wants to avoid foreclosure.

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

- Because the masses are more aware of where and when the government auctions are happening there are not as many investors competing for a pre-foreclosure property.

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

- Auctions can be either overwhelming or lead to egotistical or emotional decisions.

- You have time to have a pre-foreclosed home inspected resulting is less risk.

- You will be allowed to make a low down payment on a pre-foreclosed house. This is not the case at a foreclosure auction.

Always check to make sure that the pre-foreclosed home you’re interested in has no liens or judgments 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.

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