Advantages & Disadvantages of Buying Pre-Foreclosure Homes

House hunting isn't what it used to be withthe information about the pre-foreclosures, so be sure
comprehensive inventory listed with your local Realtor'sto ask your important questions for the seller at each
office and a fixed price tag on each property. Today'sproperty inspection.
savvy real estate buyers know how to exhaust allNot all a bed of roses, some of the disadvantages of
their resources to search out the best bargain dealbuying a pre-foreclosure include the following: The
while maintaining the integrity of their standards for thesellers are strapped with a mortgage that they cannot
property they wish to buy.or will not continue to pay, and they wish to transfer
Purchasing at a pre-foreclosure is a viable option onthe property and wriggle out of the loan balance.
the table, helping both seller and buyer meet theirSometimes the deal is in the best interest of the buyer,
financial needs. However, like everything else in life,and sometimes it pays to walk away. The seller has
these purchases have their unique ups and downs thatthe option to make the property more attractive with a
separate it from traditional house hunting. Regardless,deep discount offered, however, they will be
using foreclosure listings is a smart way to shop andresponsible to pay the difference between the final
should be your first real estate tool rather than the lastsale price and what is still owed on the mortgage loan
resort.balance. In a nutshell, the buyer's low ball offer stands a
Some of the advantages to securing your nextgood chance of being rejected by the seller. In cases
property through a pre-foreclosure sale include a widerwhere the seller is highly motivated, and does not mind
margin for negotiation than buying a piece of propertycarrying the differential loan balance on their credit, the
from market inventory at full price. The distressedpre-foreclosure sale is a win-win situation for both
home owner has received a Notice of Default, Lisparties.
Pendens, or has been advised by a real estateBuying a pre-foreclosure will take some effort, time
professional to place their home on a short sale. If theand patience on the part of the buyer, however, for
property can be sold at a fair and equitable price forthe seasoned real estate home buyer or investor, the
both buyer and seller, then it may be a sweet deal wellsavings can be dramatic. Be sure to take a checklist
worth the effort.for the property features, estimated repairs and
The difference between a foreclosure andlandscaping, and balance out a few properties versus
pre-foreclosure is that the seller is most likely still livingfinal price to get the best deal. In addition, if the home is
in the home. This usually means the buyer maystill owner occupied, the sellers may take up to 90
conduct their own due diligence with a walk-through,days to close escrow. Check with a foreclosure
employ professional inspections, and they have thelistings company to get a comprehensive list of the
option to ask the owner to make any necessarypre-foreclosure opportunities in the area and get
repairs. Foreclosure listings do not always disclose allstarted today.