What does pre-foreclosure on buying a home mean?
Question:
Answer:
pre-forclosure means the loan is in default, but foreclosure proceedings have not been initiated yet. The owners havent made their payments for a few months, the bank is preparing to take action, but hasn't yet.
You need to understand that a foreclosure is likely to have problems, Folks losing their homes will often steal the fixtures out of it, ripping out anything of value. they typically stop taking care of the upkeep, the yard will be a mess, the home is generally a fixer upper.
Bottom line: if you buy a house like this, prepare for added expenses above and beyond the purchase price.
Pre-foreclosure is a home in still in the process of being foreclosed. I would have to look into it in much more depth before taking on that kind of transaction.
It refers to the paper work and overall happenings that lead to foreclosure on a property. There is nothing wrong with purchasing such a home as it only means that the people who owned it, could not afford to pay the mortgage.
You can get a good deal on a foreclosure but make sure you understand exactly what you are paying for the house - in TOTAL.
Do you know if there are any liens against the house? Have the tenants actually moved out of the house? Can you inspect the house prior to the auction? Any problems such as lead-based-paint, etc?
Like I said you can get a good deal but arm yourself with good information. Typically though pre-foreclosures tend to be the best deal because you can bargain with the homeowner and also see the house in detail. But it requires having fast cash since the homeowner wants to sell before foreclosure and anything appearing on their credit.
Just my 2 cents.
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