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How to Find Cheap Pre-Foreclosure Properties


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Pre Foreclosure Notice

 

With the current state of the real estate market, bargains abound for the careful investor.  Whether you are looking for a home or an investment property, one of the best ways to find an absolute bargain is to pursue pre-foreclosure properties.  The purpose of today’s post is to provide an overview of how to go about this.


The first thing you’ll need to do to identify pre-foreclosure properties is to visit your local county municipal office and obtain a list of the recent “Lis Pendens” from the public records.  You can also hire a professional title company to do this for you if you want.  Lis Pendens notices are filed by lenders to announce upcoming foreclosure cases.  These filings are always done in the county within which the property sits, and they represent the first public notice of an impending foreclosure.  Lis Pendens means “suit pending” in Latin.  At this point the homeowner still holds the title, but the notice indicates that lender action will be forthcoming.


Banks are hoping that the incentive payments will cut out resistance from homeowners and offer up the best solution for all. It is a win-win for the banks, particularly because they skip out on a potentially long legal battle on the one hand, and take advantage of making a better deal through a short sale on the other.

Each of the Lis Pensens notices will have the homeowner’s name, the address of the property, the mortgage details and the contact info for the lender’s attorney.  This will allow you to do the following 5 things, in sequential order.  First, you can contact the attorney to verify that the property is still a pre-foreclosure.  Second, you can drive by the property to inspect its general condition (the exterior plus peeking in the windows) as well as the neighborhood.  Third, you can execute a title search to verify ownership and make sure that no liens are present.  Fourth, you can obtain recent comps of similar properties that were sold in the local area.  Fifth, assuming the results of the previous tasks are acceptable, you can contact the homeowner and try to initiate a purchase transaction.

Banks are hoping that the incentive payments will cut out resistance from homeowners and offer up the best solution for all. It is a win-win for the banks, particularly because they skip out on a potentially long legal battle on the one hand, and take advantage of making a better deal through a short sale on the other.

Keep in mind that if your offer is less than what is owed on the mortgage, it must be approved by the lender.  Often, this involves some negotiation with the lender, and is generally known as a short sale agreement.  In most cases, particularly if the property is a complete fixer upper home, you’ll be able to come to an amenable agreement that benefits all parties.

So, in a nutshell, that is the process of finding pre-foreclosure properties to buy.  Simply follow the steps outlined in this post, and it won’t be long before you find yourself a tremendous bargain.  Good luck!



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