| Pre-foreclosure sales are where you purchase a | | | | are littered with many houses that there may be a lot |
| residence from the owner prior to when the owner | | | | of purchasers who make a living at auctions and other |
| forecloses on it. Many real estate buyers like this kind | | | | foreclosure opportunities. Usually a house that is |
| of sale simply because the buyer and the seller are | | | | bought in an auction sells or at least 30% below its |
| motivated parties. The seller obviously is looking to | | | | current value in the marketplace. One downside is that |
| stay away from a foreclosure, while the buyer gets a | | | | you must use cash in an auction transaction. There is |
| huge discount on what is normally within the | | | | no way to obtain a mortgage in an auction for a |
| neighborhood of 10-20% or more. The homebuyer or | | | | foreclosed house due to the fact that the financing |
| investor also gets the chance to inspect the house to | | | | corporation would need to be in a position to appraise |
| make sure that there are no major structural problems | | | | and inspect the property before the purchase for that |
| with it. | | | | to occur. |
| In an auction situation, buyers should beware because | | | | With a real estate owned property the lender owns |
| these types of transactions can come with a lot of | | | | the title to the home. Typically, you can come across |
| risks. You are purchasing a house as is, which basically | | | | homes that are in this condition in a buyers market, but |
| means that you don't have an option for inspection and | | | | beware that the discounts obtained from buying a real |
| in this type of situation many people have not | | | | estate owned house will not be as large as buying a |
| maintained their properties very well. The bottom line is | | | | house and auction. The upside is that there is much |
| that you do not know exactly what it is that you are | | | | less risk involved with a real estate owned purchase. |
| obtaining. | | | | You may be able to get a mortgage to finance the |
| You can discover these foreclosure listings by going to | | | | house as well as an inspection. It is basically a great |
| bank owned or government owned websites or by | | | | alternative way to buy a house for a first-time buyer |
| finding and bidding against other investors like yourself. | | | | or a real estate investor. |
| Keep in mind that in times where foreclosure listings | | | | |