Guide in Buying a Pre-Foreclosure Property

The pre-foreclosure stage is the most difficult stage in any real estate venture. Experts have said that this can yield to some real bargains, which is a distressed to any home owners.  However, there’s one thing that all of us should be aware, that a pre-foreclosure property is not literally for sale. Remember that pre-foreclosure period is the stage between the times in which a Lis Pendens or notice of default (in judicial foreclosure) has been issued after the property is at a foreclosure auction. Pre-Foreclosure Property The following are the 9 tips that will guide you through your search for a pre-foreclosure home:

  1. Begin the Hunt – the trickiest aspect in buying a foreclosure property is the searching process. That’s because most of these properties are not yet on the market. You can start your search at housevaluestore for pre-foreclosures.  You can get all the information that you need and this for free, all that you have to do is register with a free account.  You can also check your local newspaper for foreclosure memos. You may also market yourself with flyers, postcards, signs and online postings.
  2. Drive by – If you found a property, better go for an inspection to have an idea of its location and condition. This could be a good casual meet-up with the owner and nearby neighbours.
  3. Get a status update – it is not a secret that most homeowners do not resolve their financial problems, so you need do your part and verify if the property is still in default.  You can also contact the local foreclosure specialist for more assistance.
  4. Valuation – This can be one of the best things to do for you to be sure that is to check the public records for any outstanding balance, liens and mortgages.  Ask help with your local real estate agents for a smooth way process. Additionally, there are websites that offer data to points that can be useful to ascertain value.
  5. Do some math – Subtract the expenses that you will encounter as a buyer (liens, loan balance and insurances) from the appraised value of the property.  During the times of negotiations, you can use these calculations as your breakeven number.
  6. Reach out – Once you are done doing your homework, it is now time to contact homeowners by phone call or letter and inform him that you are interested in his property. You can arrange a meeting so that you can discuss properly all the possibilities about the possible sale.
  7. Walk through– Ask the owner for a tour of his property. If he is willing you can discuss with him the cost that you might spend for repairs and this amount should be subtracted from your breakeven number.  If you don’t know how to determine the projected cost you can take a contractor along with your tour.
  8. Negotiate – There are many factors that might affect your offer, including the potential increase value and the regional real estate appreciation.  Ideally, your offer will be lower to 20% percent or more – differentiated from your projected breakeven number. Be wise! For an example, an owner may allow you to flex on the price with you, if you let them stay in the property for 30 – 40 days while he is in search for a new place to live.
  9. Put it in writing – Once a deal has been agreed, draw up an agreement (purchase). If that’s beyond your expertise, consult a real estate agent who specializes in foreclosures. Make certain that the agreement makes the deal reliant with a full title search conducted by a professional real estate inspector. 

Author Bio: Veronica Barfield is active in reading manuscripts that deals with real estate financing. People might think that she is a broad minded woman with interest on highly sophisticated scripts of laws, but she is indeed a nature enthusiast, a passionate woman who would rather go for a nature hopping than grandeur social gatherings.

Erin Emanuel