{"id":23657,"date":"2021-04-30T08:46:03","date_gmt":"2021-04-30T15:46:03","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=23657"},"modified":"2021-05-04T08:54:38","modified_gmt":"2021-05-04T15:54:38","slug":"buyer-i-bought-a-preforeclosure","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-i-bought-a-preforeclosure\/","title":{"rendered":"I Bought a Preforeclosure (Hundreds, Actually): 6 Pro Tips for Buyers"},"content":{"rendered":"

You\u2019re home shopping on all the biggest listing sites and dreaming about what could be. As you click around, you notice a listing labeled as \u201cpreforeclosure,\u201d but there\u2019s only minimal information available about the property.<\/p>\n

\u201cHuh,\u201d you think, \u201cI wonder why there are no pictures.\u201d Yet you find yourself intrigued. The home is just the right size at the right price, and it\u2019s located in the neighborhood you\u2019ve been dreaming of \u2014 a neighborhood that doesn\u2019t have a lot of homes available for sale.<\/p>\n

There\u2019s only one problem: This preforeclosure home likely isn\u2019t<\/i> for sale at all, and the owner may have no idea it\u2019s even listed on major real estate sites (more on that soon).<\/p>\n

But that doesn\u2019t mean you can\u2019t<\/i> buy a preforeclosure. With a little patience and a lot of tact, that perfect preforeclosure could be yours. But you have to know how to take the right approach.<\/p>\n

We talked to top experts with years of experience buying preforeclosures to get the rundown on how the process works, plus their best tips for buyers. Here\u2019s what you need to know.<\/p>\n

\"What<\/a>
Source: (Roger Starnes Sr \/ Unsplash)<\/figcaption><\/figure>\n

What\u2019s a preforeclosure?<\/h2>\n

When a homeowner stops making mortgage payments for at least three months, their home loan typically goes into default, and the lender initiates the foreclosure process<\/a>. Preforeclosure is the first stage of foreclosure<\/a>, so the home isn\u2019t being sent to auction \u2014\u00a0yet<\/i>.<\/p>\n

The preforeclosure period usually lasts anywhere between three and ten months. During this period, the homeowner can catch up on their missed payments and end the foreclosure process, or they can choose to sell their home to avoid foreclosure.<\/p>\n

If the owner decides to sell and owes more on the home than it\u2019s worth, they\u2019ll have to get the lender to agree to a short sale<\/a> (meaning the lender comes up \u201cshort\u201d on the sale). If they\u2019re in a good place with their equity, they can sell the home just like any other typical home sale.<\/p>\n

However, if the homeowner doesn\u2019t<\/i> sell and remains in preforeclosure, it\u2019s a waiting game while the lender finalizes the foreclosure<\/a> proceedings, and then the home is typically sold at auction.<\/p>\n

Unless,<\/i> of course, you get in there first.<\/p>\n

Are preforeclosure homes on listing sites really<\/i> for sale?<\/h2>\n

Preforeclosure homes aren\u2019t technically for sale<\/i>. Only homes listed for sale are for sale.<\/p>\n

So if you\u2019re interested in purchasing a preforeclosure, understand that it\u2019s not for the faint of heart. You\u2019ll have to convince the homeowner to sell their home to you rather than go through foreclosure proceedings.<\/p>\n

You might be wondering why someone would prefer to go through a foreclosure \u2014 and accept all of the damage it does to their credit \u2014 rather than sell their home. You\u2019d be surprised to learn how many homeowners take this route!<\/p>\n

\u201cJust because somebody\u2019s in foreclosure doesn\u2019t mean they want to sell their house,\u201d reveals William Tingle, a real estate investor who\u2019s been buying preforeclosures for more than a decade.<\/p>\n

In fact, most<\/i> people in preforeclosure don\u2019t want to sell.<\/p>\n

Tingle says he\u2019s talked to hundreds of homeowners in varying stages of foreclosure, and roughly 80% have no interest in selling, even if selling means avoiding foreclosure.<\/p>\n

\"There<\/a>
Source: (thodonal88 \/ ShutterStock)<\/figcaption><\/figure>\n

The pros and cons of buying a preforeclosure<\/h2>\n

Okay, so let\u2019s say you can convince this homeowner to sell you their home before they hit foreclosure. You probably want to know whether buying a preforeclosure is a good idea. Here are a few pros and cons to consider.<\/p>\n

Benefits of preforeclosures<\/h3>\n