Pre Foreclosure Listings Require Investment Risk Assessment
Pre foreclosure listings are a good start for individuals looking for investment opportunities, but a thorough analysis of risks should be done in order to lessen or remove the risk of losing investment money.
Pre-foreclosure purchases, when done correctly, provide the buyer with profit opportunities since pre-foreclosure properties are sold at much lower prices. But these purchases are also fraught with risks. The seller could disappear before the pre-foreclosure is completed or he could lie about the real conditions of the house and situations in the neighborhood.
There could also be liens or other claims that are not immediately posted on the deeds. Unpaid property taxes and utility bills oftentimes are among the problems faced by buyers of pre-foreclosures.
In California, there are laws that protect homeowners forced to sell their homes to avoid foreclosure. If the pre-foreclosure sale is not carried out according to state law, the sale could be rescinded and the seller could take back the property.
So if you are considering investing in pre-foreclosures, you need to know the laws and legal procedures on short sales or repo pre foreclosure sales in your state. You also need to make sure that the lender has really approved the short sale.
When looking at pre foreclosure listings to look for homes that you can further examine, it is best that you ask for the help of a buyer’s real estate agent who is an expert in the area where you like to buy a home.
It is also beneficial if you choose an agent or broker specializing in distressed short sales or pre-foreclosure sales. These types of agents are well experienced in the typical time frames of short sales and foreclosures in your state. They will know if a short sale can be completed before the final stage of the foreclosure process is reached.
If the agent is familiar with your market, he can help you identify properties that can be acquired in pre-foreclosure sales. He will also know if sellers are able to work with buyers quickly to complete short sales.
Another risk that arises in pre foreclosure sales is bankruptcy filing. There are cases where sellers file for bankruptcy protection and then negotiate to sell their distressed homes in a pre-foreclosure transaction.
Lastly, when considering pre foreclosure listings, do not be enticed by the low prices and rosy investment projections. Ask help from an experienced pre-foreclosure agent and a certified foreclosure home inspector.
Posts (RSS)