What is a pre-foreclosure home?
Question:
And also what is bank owned?
Is it safe to by a bank owned or pre-foreclosure home?
Answer:
Pre-foreclosure is a term used to describe non-traditional methods of buying and selling real estate. Typically, a buyer will secure financing from a lending institution and pay for the full amount of the purchase price with a combination of the borrowed funds and his own funds (or his "down payment").
Bank Owned or Bank REO properties are properties owned by the bank as a result of an unsuccessful foreclosure sale. These properties are in most cases available for resale to the public through future auctions or direct marketing through a Realtor. Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance. However, the price they can be acquired at can, in most cases, more than compensate for the condition of the property.
The cost of buying bank owned or pre-foreclosure home will vary based on bank policies. You can run cost comparisons between the two options considering conditions set up by the bank.
any time a person doesn't make there mortgage payments and the home is foreclosed on, the bank takes back ownership of the home. pre-foreclosure would be the bank advertising to the public that they will be taking ownership shortly, and will be selling. (they are simply trying to get people interested early enough, so they are not stuck with the home for a long time).
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