Are you in the market for a home? If you are looking to strike a deal as a homebuyer, you may want to consider a pre-foreclosure property. The convenience of browsing the internet for properties provides buyers with instant access to any listing of their choice. As you search for your next property online, you may be surprised by how many pre-foreclosures there are in your ideal location.
A property becomes a pre-foreclosure when the borrower defaults on mortgage payments and the property has not yet been repossessed and sold at auction. In many cases, pre-foreclosure homes are not yet for sale because the owners may be attempting to catch up on their mortgage payments. This is the reason why many pre-foreclosure properties are often occupied by their owners. If the property owner is unable to catch up on their payments, the home will be sold at auction by the lender.
Continue reading to learn more about the process of purchasing a pre-foreclosure home. The following information may help if you are buying a home below the market price.
How to find pre-foreclosure homes
Because many pre-foreclosure homes are not yet on the market, you may not always find them online. Begin your property search by looking up pre-foreclosure homes on a real estate search engine. You also should supplement your search by checking local newspapers and other public records of default. Never be afraid to advertise online that you are interested in purchasing a foreclosure property. If you can buy a home in cash, it is crucial to market that information online.
How to make an offer
Consider these important points of negotiation for a pre-foreclosure property:
- Potential for appreciation on the property
- Value of the regional housing market
- Types of repairs or amount of repairs that the home needs
- State laws
As you are purchasing a foreclosure property, your total costs should be considerably lower than your breakeven point. In many cases, you will need to pay for repairs to the home. Ensure that there are contingencies in any offer that you plan to submit in case the home inspection reveals significant problems with the property. If your aim is to negotiate the lowest price possible, you will likely need to be flexible. For instance, if you plan to help the seller make back payments, they may be more willing to sell their home to you. Another way to convince the homeowner is to allow them more time to continue living in their home until they find a new place to live. They may be willing to drop their asking price if you do so.
