It is a sad fact that many Americans lose their homes to foreclosure every year, in large part due to some mortgage lenders who are not diligent enough to check to see if a person has the ability to make the mortgage payments. Of course, there are also situations where a person loses there job, a primary income earner passes away, divorce, etc., that causes the homeowner to be unable to meet their mortgage obligations.
When is Pre Foreclosure Listing Available?
Once a person gets behind on their mortgage payments, the process that 
follow is fairly set. At first, the lender will file a public default notice that initiates the foreclosure process. It is at this point that the property officially enters the pre foreclosure list stage or basically, a grace period. This is when the homeowner will be warned that they are in default, but the lender is still unable to claim the property and sell it to recover the costs. Your property will be included in the pre foreclosure listings depending on state laws, and the home may be on the list for up to 6 months. However, there are two ways that the homeowner can avoid having their property foreclosed on or sold by the lender:
- Pay off the Default. If the homeowner can find the money to pay off the default amount, then the property is removed from the pre foreclosure lists. Another option is that the homeowner may be able to get a personal loan to repay the debt.
- Sell the House. Selling your house would be a drastic move, but this may be the best solution if meeting the repayments will most likely be a long-term problem. Many people also don’t understand the long-term detrimental effect a foreclosure listing will have on their credit score, and selling the home not only prevents a poor credit rating, but allows you to get the equity out of the home before a house sells at a low price at auction.
Nobody wants to have their home foreclosed upon, but at least this pre foreclosure period gives the homeowner time to find a solution to the financial problem. Waiting for the property to pass into foreclosure and be seized by the lender is never the best option. Of course, a popular property investment today is to purchase ]investment properties that are in foreclosure and flip them for a nice profit, but usually the homeowners lose a substantial part of their investment that ends up being profit for the real estate investor.
Getting Rich with Pre Foreclosure Listings
Do you know that buying a pre foreclosure list and finding a house to purchase can actually save you up to 40% of the market price of that pre-foreclosure house? Homeowners on a pre foreclosure list are very motivated to sell their home before they go into foreclosure.
You can actually make a significant profit from buying a house on the listings; however, this investment has both advantages and disadvantages. Buying houses on free pre foreclosure listings allows you the flexibility to negotiate directly with an owner instead of a bank if the home is in foreclosure. It also allows you to have adequate time to research the condition of the home and, of course, it will be much cheaper to buy a home in pre foreclosure relative to a home under no duress and is listed by a realtor. However, you need to be fair to the homeowners, especially if they have equity in the home. Try to negotiate a deal with the financial institution to lower their selling price (called a short sale). You can then buy the house for less than market value and still give the homeowners their accrued equity in the home.