Hi, Kevin! That's a questions that many prospective buyers are asking these days. Pre-foreclosure is sometimes called "short sale," too. In this case, the property owner is trying to sell for less than they currently owe their lender. Negotiating a purchase like this requires agreement to your offered price BY THE LENDER, not by the seller. So, the price you may see on the MLS or Internet may be a good "guestimate" by the seller or their real estate professional of a sales price, but it is not necessarily what the LENDER will accept. Work with a real estate professional that can do the background investigation on what the current liens are on the property, current market value, and the appropriate offer. A property that has already been forclosed is owned by the bank and can be listed in the MLS or on the Internet as "corporate owned" or "bank owned." These negotiations are much quicker than short sales and are usually priced better. Banks do not want to own real estate. You must have cash or be totally approved for funding. Most homes are sold "as is" with right to inspect. Thorough inspection of the property by a professional is recommended and you may wish to consider purchasing a home warranty as well. Be sure to have your real estate professional and the title company or attorney investigate liens and assessments and have those cleared before you take title to the property.
Hope that this overview to your questions has been helpful!
All the best,
Susan J. Ball, CIPS