The pre foreclosure period

[seneca]

Why is the pre-foreclosure period very important to investors of foreclosed properties and why are banks eager to get rid of such properties?

[tiara]

Banks do not like to own foreclosure properties because:

* They are expensive to maintain - The bank must pay taxes, insurance, maintenance and security for their bank foreclosure homes.
* The bank looks bad - Having a large inventory of bank foreclosure homes on their books just shows off their bad lending decisions.
* The bank needs to recover the money lost on bank foreclosures.
Due to these reasons, banks try to get rid of bank foreclosures as fast as they can. This is how investors can capitalize on these properties. It is often possible to negotiate deals where you can buy bank foreclosure homes or government foreclosures at a price that is anywhere from 20-60% below market value.

[ithaca]

Experienced investors know that while a bank foreclosure is being processed, owners may sell their homes in order to avoid foreclosures. This is the golden pre-foreclosure period.

Usually owners are willing to negotiate they sale of their home during this period so that they can save their credit. They are also willing to offer a low pricel in order to encourage a sale, making it a win-win situation for both parties.