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.
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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.
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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
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Lakeland Homes & Realty, LLC
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Real Estate Owned Specialist (REOS)
Phone (863) 248-7260
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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.
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