What's a Pre-Foreclosure?

What are Pre-Foreclosures?

Pre-Foreclosure is the term used for homes that have been scheduled for a foreclosure sale but have not yet gone to auction or been sold off. Often times this period of time can range from anywhere from a month to a year, depending on the customs and laws of the state or county. Just because they have not yet been sold off does not mean they cannot be purchased, as many home owners look to sell their home before a foreclosure sale takes place.

How Preforeclosures Begin

The process of foreclosure begins when a homeowner defaults on their loan. Generally when this occurs, the lender involved will issue the homeowner a notice of default, and for all intents and purposes this begins the preforeclosure period. From here on out many things may happen—the homeowner may raise the money to pay off their default debt to the bank or lender and stay in their home, the lender issues a Notice of Sale and arranges to put the property up for sale at a later date, or the homeowner finds someone willing to buy their home and avoids a foreclosure sale. This last option is becoming increasingly common, as investors and home buyers alike often look to find great homes for sale at extremely low prices through the preforeclosure market.

Low Prices on Pre Foreclosure Homes

Buying or investing in preforeclosure homes can be extremely lucrative, because often times a homeowner will be willing to sell off real estate in danger of foreclosure for very low prices simply to avoid a foreclosure sale. Many buyers end up finding deals of anywhere up to 50% off the true market value of a property.

Finding the Right Pre-Foreclosures

Since real estate sold by agents and brokers dominate the market, it can be hard to find properties available through this means. A good idea is to consult a pre-foreclosure specialist to find property available in your area, as well as information on how to go about purchasing these valuable properties.

If you have questions about buying a pre-foreclosure home in the Greater Kansas City area, please contact Ron Henderson at 816-651-9001 for more information.