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What does pre-foreclosure mean for potential buyers?

  • June 03 2013 - Glen Ellyn
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Answers (3)

Profile picture for TShepherd1

It is called a Short- Sale. This process is allowed by the bank of a home owner who is in trouble with their mortgage. The bank will allow the home to sale their home.

  • June 03 2013
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It is also called a short sale. The buyer needs to negotiate the price/terms with the seller, BUT the lien hlder needs to approve the contract and that can take 2-5 months and sometimes they do not agree with the price and can kill the deal. They are very irritating to deal with, but you can get a good price.,
  • June 03 2013
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A little more information is needed... but, presuming you are a potential buyer looking at a property that notes "pre-foreclosure" that likely means the current owner of the property has received a Notice of Default from their lender, i.e. they are behind on the mortgage payment.  The foreclosure process may be started shortly by the lender, if not already.  Depending on the State, the lender, any deals they are able to make, and a million other factors, this could mean the property will eventually become a foreclosure, and re-claimed by the lender, sold at auction, sold via a short sale, or other disposition.  In reality, this is interesting information to see, but not that relevant to the average buyer, unless you plan to pay all cash at a potential future auction or directly approach the current owner and try to angle some sort of loan take-over or short sale agreement.  It could also be useful if you are looking at a particular neighborhood and see a significant amount of pending foreclosures, as that may indicate more potential inventory on the way.  Depending on the homes, the neighborhood, etc., the prices may be impacted by distressed properties becoming available.  Good luck!     
  • June 03 2013
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