Homes in foreclosure are often owned by the bank or an intermediate. You can purchase it the same way you buy a home from a seller. Collect your down payment, get pre-approved and find an full time agent who works the market your are interested in so you have an expert on your side when you make an offer.
Be prepared for a time line with no measure. I've had bank-owned properties which close within a few months, and I just encouraged a buyer walk away from from a negotiated short sale which we agreed to the terms in July 09.
Buyer beware is the best advice in a short sale/foreclosure purchase. I encourage my clients to do dual duty if they want to go forward with a short sale. Most often we continue searching for a "regular sale" and whatever happens first, so be it.... more
Hello Kp. I am a real estate agent in Grass Valley and I would love to answer your question, but I'd need a little bit more information about the property. How do you know that it is in pre-foreclosure? Do you know the owner? When you say pre-foreclosure, do you mean that a notice of default has not yet been filed (i.e., the foreclosure process has not yet been started) or do you mean that it is in foreclosure, but the trustee sale has not yet happened? Timing is very important when it comes to dealing with foreclosure homes. For instance, let's say the notice of default was recorded 2 weeks ago and you want to make an offer on the property. Since the property is in the early stages of the foreclosure process (i.e., the trustee sale will not happen for at least another 3.5 months) you have time to negotiate. On the other hand, if the trustee sale is only 2 weeks away, you'd run into a time problem because the foreclosure process is not put on hold while you negotiate unless the lender agrees to postpone the trustee sale. The other thing you'll want to know is whether purchasing the property would result in a short sale (i.e., the value of the property is less than what's owed on the property). If it's a short sale, you or the seller would have to negotiate with the lender(s) to get an approval. Negotiating a short sale is really something that you should leave up to a real estate agent who has experience in short sale negotiations. While you don't need a lawyer or an agent to purchase real estate, whether it's a foreclosure or short sale, depending on your experience with purchasing real estate, it may not be advisable to do it without an agent. In CA, lawyers are usually not involved in negotiations, but that does not mean that they could not be. I personally don't know of any attorneys who are handling short sale negotiations. I have successfully negotiated short sales (actually, all my short sales closed) and I would be happy to answer any of your questions. You can contact me through Trulia or call me at the number below. To e-mail me, just go to my profile and click on the "Contact Me" button. I usually don't answer questions on Trulia with a "contact me" solicitation, but since I am an agent in Grass Valley and experienced with foreclosures and short sales, I feel that I could be of assistance to you.