What Is A Pre-foreclosure?
Many have heard the term pre-foreclosure – but what does it really mean? A pre-foreclosure is when a property is in the early stages of being repossessed. The process begins when the lender files a notice of default on the property because the owner has not been making mortgage payments. The owner then has the option to either reverse the default status by making up the late payments or sell the property before it goes into foreclosure. There are many things to identify when buying a pre-foreclosure home and how to see if a home is in pre-foreclosure.
Investing in a pre-foreclosure home is beneficial amongst real estate investors for many reasons. It offers a discount for the investor while helping the homeowner avoid foreclosure. With the homeowner being on a timeline to try to sell their property before the foreclosure sale, they are more likely to accept a discount from real estate investors in order to do so. Additionally, investors who negotiate property details before they hit foreclosure auctions will often help them achieve an even bigger discount. Although this can be a difficult process, many investors find the payoff well worth the time and effort.
Pre-foreclosure properties can be hard to come by, so how do you see if a house is in pre-foreclosure? Below are a few ways to identify a pre-foreclosure property:
- County Court Office: Laws and regulations vary from state to state, however, Notices of Default (NOD) are typically public records and will be recorded by your local county court.
- Online Records: Counties will also typically provide property databases online. Visit your local county website and search “property data” to locate any online records that are provided.
- Legal Notices: Properties that are up for pre-foreclosure auction can also be found by searching the legal notice section of your local newspaper.
- Multiple Listing Service: Pre-foreclosure properties can be found by looking for listings in the multiple listing service (MLS), which is typically set up by a real estate agent.
Real estate agents and investors can benefit from pre-foreclosure homes. They will typically market pre-foreclosure leads through mailers that can cost between $0.45 – $0.72 each, which is not a very cost-effective option. Using Ivy RE Data, you can access the same list of properties you would use for a mailer to capture phone numbers and email addresses for all of those homeowners for less than the cost of a mailer.
Although pre-foreclosure properties can often be hard to come by, you’ll be ahead of the competition if you follow these tips. To learn more about pre-foreclosures and how Ivy Data can propel you ahead of the competition, visit our website or call us at 602.698.8787!