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Friday, August 31, 2012

Homebuyers: The Pros and Cons of Pre-Foreclosure Sales

Are you looking to buy a new home?  If so and if you are on a limited budget, you may use the internet to research foreclosures.  The sale of foreclosed properties is on the rise, due to their affordable prices.  Somewhere in the mix, you may find homes for sale that are in the pre-foreclosure stages.  As you can likely gather from the name, these are properties that are headed for foreclosure, but not yet there.

As stated above, some pre-foreclosure properties are listed available for sale online.  These may appear on foreclosure listing websites, but not always.  There are two main ways in which pre-foreclosures are sold.  A real estate agent is used or the current homeowners list the home as for sale by owner.  As for who you should do business with, it depends on your own personal preference.

One of the many pros or plus sides to buying a pre-foreclosure that is listed through a real estate agent is communication.  That real estate agent is whom you will have direct communication with.  This may give you comfort and peace of mind.  It is no secret that homeowners facing foreclosure are angry and upset.  You can discuss the property and talk freely with the real estate agent in charge of the sale, but without having to worry about angering or offending them.

The biggest con or downside to buying a pre-closure through a real estate agent is the selling price.  Real estate agents take a percentage of each sale.  To ensure they get a decent paycheck, the price of the home increases.  While pre-foreclosure homes, even in these types of cases, are still cheap, you may get a better deal when buying directly from the homeowner.

Speaking of buying directly from the homeowner, there are a number of benefits to doing so.  One of those benefits is the deal that you may be able to walk away with.  At the last minute, some homeowners will do just about anything to sell their homes before foreclosure starts.  Selling a home allows a homeowner to keep their credit in good standing. This means that you may be able to negotiate a better deal.  All that really matters is that the mortgage lender gets their agreed upon share.

As it was previously stated, many homeowners are dealing with a wide array of emotions when faced with foreclosure.  You may see this in the form of uncertainty.  A homeowner may want to try and put-off the buying process as long as possible.  Deep down, all homeowners wish for a last minute reprieve that will allow them to keep their properties.  If you want to buy the property, make your intentions known, but do not be too pushy. 

In addition to buying a for sale by owner pre-foreclosure, you may want to do a little bit of research.  There are millions of homeowners facing foreclosure.  Some of those homeowners do not know all of their options.  You can approach a homeowner yourself and inquire about buying their home.  You can research foreclosure records online or in local government offices.  To get started, it is recommended that you send correspondence through the mail.  This is considered less rude and invasive.  If you hear back, good.  If not, you may want to try again in another month.

For help on finding a home on the foreclosure list, contactme at

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