Buying pre-foreclosure property
There are three stages where you can buy foreclosure property - before the foreclosure auction, at the auction, or after the auction through a real estate broker. Serious investors generally prefer to buy pre-foreclosure property as the potential profits are higher and there are fewer risks than at public auction. However, this does involve approaching people directly and talking them into selling their homes.
In industry terms, homes that are facing foreclosure are known as 'distressed homes'. This term also describes many homeowners who find themselves in this situation. It is important to remember that the people who are facing foreclosure may be losing their homes due to divorce, bereavement or other circumstances beyond their control. They may not welcome attempts to make money from their misfortune.
If you are serious about buying pre-foreclosure property, you must locate houses that are facing foreclosure and approach the owners directly - normally in person - with a cash offer for their home. Both you and the homeowner will know that the offer is less than market value, so it is down to you to explain the implication of foreclosure on the homeowner's credit and the benefits of making a quick sale.
Although the sale may benefit the distressed homeowner in the long run, they may need a lot of persuading and it can take several visits to arrange a sale. Predictably, some investors find the whole process far too mercenary. For a more information on techniques for negotiating a pre-foreclosure sale visit Foreclosures.com (www.foreclosures.com).
To buy pre-foreclosure property, you must first find homeowners who are in default. The best place to find pre-foreclosure leads is the local County Courthouse. Investors are usually entitled to browse the listings of recently filed notices of default (or Lis Pendens, depending on the state) to find contact details for property owners and lenders who have filed notices of default. These lenders may be able to provide a list of more properties facing foreclosure.
Alternatively, you can find all sort of property information, including notices of default and other liens, on the website NETROnline (www.netronline.com). Several foreclosure websites offer training courses in buying pre-foreclosures, including Preforeclosures.com (www.preforeclosure.com) and Foreclosures.com. However, remember that you may be able to find the same information for free on the web.