Be a Smart Preforeclosure Short Sales Investor
For astute investors, the best time to purchase a property is during preforeclosure short sales. But as with any major investment, preforeclosure short sales buying has its own risk. And if you do not do some research and exercise due diligence, you will end up having a liability in your hand instead of a profitable investment. So take down some few notes and start your foreclosure education now.
What is Pre Foreclosure
Pre foreclosure is the time between the receipt of a notice of default of the delinquent homeowner and the scheduling of foreclosure sale. It is during this time when the homeowner decides to sell his distressed property in order to avoid the trouble of going into foreclosure and ruining his credit standing.
You can get a good deal during the pre foreclosure period because you get to negotiate directly with a homeowner who is desperate enough to sell his property immediately to avoid foreclosures. This means that the homeowner would consider any reasonable offer that will be made for his property.
Before making an offer, make sure that you have put your finances in order. Having a pre-approved loan would be to your advantage when negotiating with the homeowner.
Make sure that you inspect the property thoroughly before closing the deal. Some homeowners would not reveal to you the real conditions of the property, especially if it has major hidden structural problems, for fear that you might walk away from the deal.
What is Short Sale
A short sale involves the homeowner selling the property at a lower price than the total mortgage he owed to his lender. This preforeclosure short sales method requires the lender's full cooperation before a sale can push through.
Lenders have to agree to accept the sale price as settlement for the total mortgage owed by the troubled homeowner.
Preforeclosure short sales offer benefits to all parties involved. The homeowner will get to sell his property and avoid foreclosures, the lender gets to avoid the trouble of unloading the property and the cost associated with foreclosure and the buyer gets to buy a cheap property.
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