Pre Foreclosure Homes – the Market, the Method
As a real estate investor, you should know the advantages of buying low…and that could mean that you investigate the market in pre foreclosure homes. When homeowners can’t or won’t keep up with their mortgage payments, the financial institution files a notice of default, and the property is then in pre foreclosure. When pre foreclosure homes are sold, the owner is able to use the proceeds of the sale to settle their debt with the lender , even if the amount of the sale is lower than the full amount owed on the mortgage. The bank or lender and the homeowner have agreed to the sale , if the lender will accept the lesser amount. Pre foreclosure homes can be an excellent deal for the real estate investor because the homeowners are exceptionally motivated to sell. Typically pre foreclosure homes are sold by the owner or a trustee, which helps the real estate investor, who is in a position to negotiate. With a home of this type, it is recommended to have a home inspection. Pre foreclosure homes have a higher than usual percentage of being left in some state of disrepair. The inspector can provide the buyer with a written disclosure of the condition of the property . While many foreclosure and pre foreclosure homes are sold “as is,” this disclosure might be helpful when negotiating price with the owner . Shop around for financing options that are designed specifically for foreclosure and pre foreclosure homes. And perhaps include additional financing to cover the approximate cost for necessary renovations and repairs that were revealed } during the home inspection. Pre foreclosure homes do take some extra work, but since they are available well below market value, they can be a smart and profitable investment for the real estate investor. If you are interested in this type of investment, a good foreclosure subscription service can provide you with a listing of pre foreclosure homes in your preferred area. There is money to be made purchasing pre foreclosure homes.
