Oct

29

Explore pre foreclosure properties for bargains

Filed Under Buying Foreclosures 

Pre foreclosure involves approaching the owner/borrower of the defaulted property directly during the grace period and making an offer to buy out this property. The borrower can use this amount to pay up the outstanding amount and spare a blot on his credit history. The buyer has sufficient time to research the title and inspect the condition and can very easily win discounts of 20-40 percent to the market value.

The period is a last chance for the defaulting owner to stop the foreclosure process by paying off what is outstanding, or by disposing the property. This grace period to the defaulting owner may last several months, and patience is a virtue one needs to cultivate during this time period.

The first step towards buying a property in the grace period is to get in touch with the trustee, or attorney listed on the Property Details page to know if the property is still in foreclosure. They have the updated information if the owner has sold the property or reinstated the loan. They cannot answer any other question regarding the property. IF the property is hitherto in foreclosure and one feels it would be a prudent investment, then it is necessary to get in touch with the owner. One can either chooses to do so using a post card, or followed by another one if the first one goes unresponded. Another option is to call the owner if one can track down his telephone number, or go and meet him in person.

In case the loan does not get repaid till the end of the grace period, prospective buyers can bid on the property at a public auction. Buyers usually have to pay cash and may not have sufficient time to inspect the title of the property or its condition. However, auctions offer bargains and do not require one to go through the trouble of having to deal straight with the owner.

In case the lender or government department takes control of the property, either by way of consent of the owner or by purchasing it back at a public auction, it is usually with the idea of offloading it to recoup the outstanding amount on the loan. However, the potential bargain is less than that during pre foreclosure or that during an auction.

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“Tell them dear, that if eyes were made for seeing,Then beauty is its own excuse for beingWhy thou wert there, O rival of the roseI never sought to ask, I never knewBut, in my simple ignorance supposeThe selfsame power that brought me there brought you.”
by Ralph Waldo Emerson

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