Why You Should Purchase Pre-foreclosure Properties Instead Of Waiting
For a lot of people, foreclosure is exactly the same as pre-foreclosure
. However, there is a difference in both. The difference is when when the bank has not yet finished preparing the paperwork for the property. Actually, there is a very big difference between one house that is officially foreclosed and another which is still in the pre-foreclosure state.
First off, you have to be in the know of the term pre-foreclosure. It is true that banks undergo a process wherein the take back a property if an owner is not able to meet the obligated monthly payments. But within this process is a state or a time frame wherein they have not claimed it back yet. It is in this particular time frame of pre-foreclosure where the owner of the home still has some control over his property. As mentioned, there are some advantages to buying a home that is considered to be in the pre-foreclosure state. One very obvious and attractive reason is that the price of the pre-foreclosed house is within a very reasonable range. The owner of the property is aware that in time, the bank will simply step in and sell the property. The owner would definitely want to be able to rid himself of the property before it ends up affecting their credit rating in a negative and irreversible manner.
Since the property is still not within the control of the bank, you as the potential buyer can still make direct deals with the owner of the house. Because of this, you have more leeway to negotiate. Usually when banks have already made the sale price there is no other way of negotiating it with them or trying to convince them to pull down the price a little lower. But when you deal with the owner directly, he and you can still come to an agreement that is more beneficial to you.
This usually works out fine, because time is of the element in trying to sell a house before the bank gets to finalize the foreclosure. Remember that the owner definitely does not want such a foreclosure to make its mark on their own credit history. Another is that if the bank ends up stepping in, they also lose all chances to make a bit of a profit out of the sale money. And of course, you tend to have very little competition when it comes to rallying for your right to purchase a pre-foreclosed property.
Looking for a pre-foreclosed property is a bit tricky because only a few people actually know where these can be found. As a clue, you can usually check out sightings of these while driving around keeping your eyes peeled for sale signs, looking at the news paper and checking out the online listings. You can also ask lenders if they know of any good pre-foreclosed properties, too.
by: Beverly Manago
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