Yearly, about one million homes get auctioned to reimburse the accumulated mortgage payments homeowners couldn't pay. With the recession hitting the world hard, the number of homes being auctioned has doubled, thus providing real estate investors with an opportunity to invest their dollars in a surefire way that can provide them with returns that can amount to 20%. However, buying and selling are all about perfect timing. One of the best times when one can easily purchase real estate is during preforeclosure.
Basic Information
Preforeclosure is the time period prompted when homeowners miss several mortgage payments, thus leading to the sale of their homes. This time usually starts after the filing of a foreclosure claim and ends before the house is sold at a public auction or trustee's sale. During this time, which is usually 90-120 days long in different states, the homeowner can either collect money to pay off the default amount or sell the house to gain enough to pay the lenders and remain off the streets.
This is where the real estate investor comes in. By purchasing the house during this time period, not only will the real estate investor gain new property, but also the lender will have his money while the homeowner will become free from debt. If you are a real estate investor who wants to enter the market through this technique, here are a few things you need to remember.
Steps for Investing in Preforeclosure Deals
If you are interested in trying your hand at buying property during preforeclosure, you must remember that you may not get everything right from the first time. Experts in this field dissuade rookies from trying their hand in this market without a few years of experience to back them. However, if you're still interested, here are 5 steps to make sure that you get the best value for your money:
Find Property: Foreclosed properties will not just appear on your doorstep, you will have to look for them.
Advantages of Preforeclosure
Buying during preforeclosure is one of the best ideas a real estate investor can have, here's why:
Discounts of market value: When you buy a house that is about to be sold at a public auction, the best time to purchase it is within the 1st 60 to 90 days of the default period when they can offer a low price. This can save you up to 40% of the house's worth easily, which is a hefty amount to spend on the repairs the house may need.
Feasible sales agreements: With the paperwork mainly being handled by you and the homeowner, customized agreements can be prepared
The time for preforeclosure is the best for you to make an investment that would provide you with good remuneration as well as help homeowners in need. Just follow the steps and stay alert at all times to receive the best value for your money.
