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steph.mulli…, Real Estate Pro in Lakeland, FL

What does a pre foreclosure mean?

Asked by steph.mullica, Lakeland, FL Mon Mar 18, 2013

My husband and I are looking to buy a house and these pre foreclosures have great prices listed but seem too good to be true. Whats the catch?

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The status of a property which is in the early stages of being repossessed due to the property owner's inability to pay an outstanding mortgage obligation. Reaching pre-foreclosure status begins when the lender files a default notice on the property, which informs the property owner that the lender will proceed with pursuing legal action if the debt is not taken care of. At this point, the property owner has the opportunity to pay off the outstanding debt or sell the property before it is foreclosed.

BREAKING DOWN 'Pre-Foreclosure'
Property owners who are in the pre-foreclosure stage may enter into a short sale in order to pay off outstanding debts. Because the property owner is looking to avoid being foreclosed upon, an interested party may be able to purchase the property for less than if he or she waited until the property went into foreclosure. After a property is foreclosed upon, the lender is more likely to try to sell the property at lower prices.

Find the Best Financial Advisor for You - http://foreclosureprocess.net/for-sale-by-owner
2 votes Thank Flag Link Wed Feb 10, 2016
Many people have told me they found this article easy to read and understand, hope you feel the same:

Tony Vega
La Rosa Realty
1 vote Thank Flag Link Mon Mar 18, 2013
A pre-foreclosure home is any home the home owner has defaulted on their mortgage. After a home owner has missed three consecutive mortgage payments the bank starts the foreclosure process. There are many steps that have to be taken for the bank to foreclosure on a property and each state the process varies. Until the foreclosure sale is executed the home is in a pre-foreclosure status.
0 votes Thank Flag Link Fri Aug 21, 2015
Good answer Milton. RealtyTrac tracks and posts all preforclosures on sites like Zillow (even if they are not actually for sale). It is confusing because they appear to be for sale. Much of the time the owners are simply behind in their payments, but they are labeled as pre-foreclosures. Also, many of those properties don't ever hit the market since the owners can get their home out of pre-foreclosure status by getting caught up in their payments or modifying their loan with their mortgage company. If you see a pre-foreclosure you are interested in, be prepared to wait possibly a year or more for that property to hit the market. However, it may never hit the market. I hope this answer is helpful. Good Luck!
0 votes Thank Flag Link Mon Dec 2, 2013
With all due respect, a Pre-foreclosure does not equal a short sale.

Pre-foreclosure simply means the homeowner has fallen behind in mortgage payments and the mortgage company has not completed a foreclosure on the property yet.

A short sale means the mortgage note (amount owed) is greater than the appraised value and the mortgage company agrees to take LESS than the amount owed (short) in order to sell the property.

If the homeowner has hired the right Realtor / negotiator, the list price would be very close to what the mortgage company will accept which reduces the time to close.

James Trow
Future Home Realty
0 votes Thank Flag Link Sat Nov 30, 2013
Pre-foreclosure=short sale and 99% are not approved and if you have patience you might catch a deal if the bank doesn't counter and elevate the asking price. Insure to get an inspection to include termite, because many of these homes have not been maintained.

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0 votes Thank Flag Link Wed Sep 18, 2013

I pre-foreclosure is generally when the homeowner falls behind on the mortgage payments anywhere from 1 to 3 months. Generally, once the homowner falls behind more than 3 payments, the lender starts or can start the legal foreclosure. When the lender ends up foreclosing and then owning the property, then the property is referred to as a "bank owned" or "REO" for "real estate owned." Many websites list homes in "preoreclosure." However, many of these homes are not really for sale. Some of these webisites also provide an estimate of the market value. However, these are usually computer generated estimates. These estimates do not take into account the actual condition of the house.

Milton De La Cruz
Licensed Real Estate Broker / Owner
Lakeland Homes & Realty, LLC
Certified Distressed Property Expert (CDPE)
Real Estate Owned Specialist (REOS)
Phone (863) 248-7260
Fax (877) 580-4068

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0 votes Thank Flag Link Mon Mar 18, 2013
A P.F. is the same as a SHORTSALE; meaning that the homeowner owes the Bank more than the house is worth.
In order for the S.S. to go through, the bank must be willing to accept less than they are owed.

The homeowner LISTS the house with a Realtor, gets approval from the bank, and tries to sell the house.

A Shortsale can take from a few months, to a year to accomplish; assuming that the bank is willing to co-operate.

Talk to a Realtor; your Buyer's agent is paid by the Bank (Seller) and therefore is free to you.
Best deal you'll ever see!
0 votes Thank Flag Link Mon Mar 18, 2013
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