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Pre Foreclosure

Every now and then, an individual will find himself in the position where he can no longer make payments on his mortgage. After his various attempts to salvage his mortgage have failed, he may look at doing a pre foreclosure sale in a last effort to salvage his credit record.

A pre foreclosure sale is the selling of a property that has been marked for foreclosure by the property owner. Buy choosing to sell and use the resulting money to pay off his mortgage, he avoids a bank foreclosure, government foreclosure or any other type of foreclosure. Due to the nature of the arrangement, a pre foreclosure property is often cheaper than those which are actually foreclosed.

There is a window period for pre foreclosure sales. This window opens when the Lis Pendens is filed. The Lis Pendens is a notice stating that legal action is being taken on the defaulted mortgage. The window closes at the foreclosure auction. During this window, you can approach a home owner and offer to purchase the home.

The Lis Pendens is a document which is made available to the public, so if you are looking for a pre foreclosure property, you can start by consulting newspapers or you can peruse notices at a county courthouse. Once you have found a potential house, you need to consider how much the property is worth. Though a default amount will be stated on the legal notice, you need to try and determine how much of a profit you can make buying the home. Then you need to contact the homeowner and make an enticing offer that is advantageous to both you and the home owner. The most successful ways of contacting the homeowner are in writing, over the phone or in person.

If the owner decides to accept your offer and sell, you need to get it in writing. All parties involved in the mortgage need to sign the Real Estate Purchase and the Sale Agreement.

With the paperwork done, you need to make sure that the foreclosure process is halted. You can get the property inspected for termites and roof stability and make sure that there where no other people involved in the sale of the property. Usually, taking the time to find a pre foreclosure home will result in you a getting good value home for your money

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