How do you define pre-foreclosure?

by admin on August 28, 2010

Question:

How do you define pre-foreclosure?

Answer:

A pre-foreclosure home is a home or property designated by the bank to be sold at a foreclosure sale or auction on a specific date. Prior to the date of sale, the homes is said to be in pre-foreclosure. This is a significant stage for both an owner and a buyer. During this time, the owner is given time to sell the house and is able to pay as much of the outstanding loan or balance as he can. Usually, banks require that the proceeds of the sale of a pre-foreclosure home should be equal to a set percentage of the appraised value of the home.

For the first thirty days of pre-foreclosure, the house must be sold at a price that generates about 88% of the fair market value of the house. Buyers benefit during this stage too because of the low prices of pre-foreclosure homes. Many investors can make great investments in pre-foreclosure homes. For buyers, remember to inspect the pre-foreclosure home properly in order to determine the current and exact condition of the house. Most importantly, check whether or not the price of the house is fit for its current state. You can check other sources from the US Department of Housing FAQ to read more details on this matter.

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