Pre-foreclosure

In some instances you may be able to find a home in pre-foreclosure. In this case, you offer to purchase a house that is close to going into default and buy the house directly from the homeowner. The homeowner would sign the deed to the house over to you, and you would assume the mortgage and make any back payments due to the lender. Once the notice of default is filed with the county where the property is located, you can contact the homeowner via phone, mail, or in person. Some benefits of this option include:

• You can conduct a title search before purchasing the property.
• View the inside of the home.
• Schedule a home inspection.
• You can purchase the home at a discount (usually around 10 to 20 percent below the home’s value).

This option also benefits the owner because they are able to avoid foreclosure and salvage some of the equity in the home. Be mindful, however, that there is a short window of time to buy a home in pre-foreclosure so you will need to work fast.