Few experiences are scarier for a homeowner than foreclosure. But for an investor, the situation presents a major opportunity.
The absolute best time to get in on a foreclosure deal isn’t once the legal process begins. You’ll want to pursue property deals during pre foreclosure to get the best discount.
What is pre foreclosure? Take a look at this guide to understanding pre-foreclosure deals.
What is Pre Foreclosure?
Pre-foreclosure is the period before the foreclosure process officially begins. Many homeowners don’t realize the foreclosure is a legal proceeding that can last months or years depending on where you live.
The pre-foreclosure period is marked by the extent of your delinquency. So, if you’re only a few weeks, or even a month, behind on your mortgage payments you’re not in pre-foreclosure.
The bank sends out a notice to homeowners who are entering pre-foreclosure warning them they’re planning to file for foreclosure. The length of this time period varies based on your lender. Some lenders send the notice after only 60 days.
Others might not start the pre-foreclosure process until after 6 months. Once the homeowner is given notice, it’s time to either pay the past due balance or find a fast way out.
The Investor’s Opportunity
Pre-foreclosure deals are the biggest win-win solution in real estate. Unlike a foreclosure auction sale, the pre-foreclosure sale means the investor and the homeowner walk away unscathed.
Homeowners won’t have to wait years before they can qualify to buy a home again. Foreclosures follow you for years limiting your ability to get loans, credit cards, and some jobs.
Having an investor swoop in and save the day means the homeowner can continue to thrive financially once he or she finds an affordable home.
Finding Pre Foreclosure Deals
The process of finding pre-foreclosure deals is tricky. You won’t find them advertised anywhere.
In order to attract sellers, you’ll need to post notices that you’re willing to buy homes from buyers in distress. You also need to do your research.
There are records of delinquent homeowners with your county courthouse. It’ll take some digging, but following up with these homeowners gives you a chance to discuss buying their property and helping your business at the same time.
Not every homeowner will see the opportunity but it’s worth extending a hand to someone who’ll otherwise lose their home to the legal system.
If you’re looking for insider tips on the pre-foreclosure dealmaking process, read more here.
How Do I Buy a Pre-Foreclosure?
There are so many ways to find and close on a pre-foreclosure deal. What is a pre foreclosure deal?
A home that can be offered at a discount before it goes into foreclosure. Homeowners still have the right to sell their homes during this period.
If you’re a good negotiator, you can leave the closing table with a great new property while helping a homeowner get back on their feet. For more information and tips, visit our blog for updates.
