Pre foreclosure and the short sale

Finding a property that is Pre foreclosed may be both the best and worst. On the one hand, you’re approaching the hapless homeowner when he’s at his lowest. On the other hand, if you can contact a distressed homeowner as soon as or even before his troubles become public knowledge (usually you can find in the paper listing form of a “notice of default”), you know that the homeowner has to sell and fast, you are now in a great position to work out a deal.

Actually buying a property from someone at this point is also helping him to avoid the all but permanent pain of a foreclosure.

Another kind of Pre-foreclosed investment option is the short sale. Such homes are priced below what the owner owes on the mortgage and must be approved by the bank. A short sale often occurs when a home worth less than the mortgage on the home.

On one hand you and do your due diligence and make an offer without having to engage the seller directly (usually those homes put on the market with the help of a real estate agent). On the other hand, once the house is on the market, you’re competing with everyone looking for a deal.

Note that if your offer is accepted, it could take weeks, even months, for the bank to respond.

Be sure to do your homework, starting with a thorough market analysis of comparable homes. A good Idea is to submit the statistics with the offer.

Learn now about foreclosure investing using public auctions