What Is a Pre-Foreclosure Property?
A pre-foreclosure property has a delinquent loan and the property owner is in imminent danger of losing his property due to foreclosure. The property has been listed as delinquent and will soon be taken into the custody by the lender.
Buyers may be able to obtain a pre-foreclosure for 40 percent less than the property’s market value, and the deal would close quicker than would a foreclosure. The competition for the property may be fierce, though, and the property is sold in “as is” condition. When a property is in pre-foreclosure (NOD, LIS), the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. The pre-foreclosure period can last several months, so you may need to be patient when trying to contact the owner in default.
The Buying Process
It can be an exciting and sometimes overwhelming process to find the right property for you to purchase. You want to ensure the property you purchase is right for you and that you have a highly experienced professional real estate agent on your side to help guide you through the process.
If you are hunting for an investment property or a home to live in, you may want to consider buying Pre-Foreclosures.
There are many factors to consider when buying a Pre-foreclosure property compared to a traditional purchase. Use a real estate agent to guide you to better understand the steps involved in buying a Pre-foreclosure property to increase your likelihood of success in finding one that is right for you.
Buying A Short sale
You could save a significant amount of money when you buy a Short sale property. Studies have shown that the average discount for a Short sale property (when compared to regular, non-distressed properties) is around 27%. But this is not the kind of process you want to rush into and do it yourself. Before you attempt to buy a Short sale property, you need to understand the process that occurs when a bank is involved. You must also be familiar with the concept of comparable sales, and how you can use them to evaluate the asking price of a Short sale property. Lastly, you must understand the offer process. Using a highly experienced professional real estate agent is highly recommended when dealing with this type of sale.
Buying REO Properties
An REO property is owned by the lender as a result of the previous owner defaulting on the loan. This is also known as a foreclosed property or a bank-owned property. REO properties are an affordable option, but there are also more things to watch for with this type of properties purchase. The two common ways of buying a foreclosed/REO property are through a real estate agent or through a public auction. One of the benefits of buying a bank-owned REO property is that investors can purchase the property free of title liens and other claims. Lenders generally expunge all second and third liens, as wells as delinquent taxes, HOA and mechanics’ liens. Another benefit of buying an REO property is that they are generally vacant. Investors can save a tremendous amount of time and energy because the eviction process has been taking care of by the bank.
Bottom line
If you want to buy a pre- foreclosure, Short sale or an REO properties you need to stay on top of your market and act fast. Things move very quickly and there are plenty of other buyers looking for the same good deal that you're after. You need to know about pre- foreclosures, short sales and REO properties as soon as they come onto the market. You can get this information searching real estate portals, from real estate agents or the county offices at your location for free.
