What is the process for buying a pre-foreclosure home?

Asked by Mmmaldonado7_3, Wesley Chapel, FL Fri Dec 2, 2011

Help the community by answering this question:

+ web reference
Web reference:


Erek Kirsten, Agent, Tampa, FL
Sat Dec 3, 2011
It's the same as it is for buying anything else... Make an offer. Give yourself an out, if you don't get what you bargained for.
Web Reference:  http://www.KirstenRealty.com
0 votes
Lynn Brock, Agent, Sarasota, FL
Sat Dec 3, 2011
Mmmaldonado7...having read through all of the comments posted to answer your question you have received some pertinent information regarding a short sale. As a buyer be prepared to submit your paperwork along with your offer to purchase. If you are a cash buyer or a buyer seeking a mortgage. You may be asked to show proof of funds or a mortgage pre approval letter.

A short sale is a bit more complex transaction than a regular sale. It's strongly suggested that you use the services of a realtor. Preferrably an agent knowledgeable with short sales and pre foreclosures. Agents with CDPE (certified distressed property expert) is a good place to start.

A short sale can take upwards of 4 to six months to close. The terms of the sale will be determined by the lender(s). To start a short sale you and a property owner execute a purchase offer. This paperwork along with the seller's paperwork and your paperwork are submitted to the lender for review and acceptance or a counter offer.

Best to use an agent. Good Luck
0 votes
Lyle Wolf, Agent, Morristown, NJ
Fri Dec 2, 2011
You might find this article on Short Sales helpful:
What Every Buyer Should Know About Short Sales
0 votes
Steven Pahl, Agent, Tampa, FL
Fri Dec 2, 2011
The term pre-foreclosure applies when the lender is attempting to take back the house because the owner has stopped paying the mortgage. You can read a fairly good, but lengthy explanation here on Wikipedia:


Florida is a "judicial" state, so the bank must go to court in order to complete the foreclose process and obtain a judgement order. The home does not have to be considered a "short sale"; where the mortgage is more than the home is worth, thus the terms upside down or underwater. Although, this is common these days with many of the homes in the Tampa Bay market, homes that have "equity" can also be foreclosed on if the owners stop making the mortgage payment. They can also be foreclosed on by an HOA, if the homeowner stops paying their HOA dues.

Buying a home that is in pre-foreclosure is basically the same as purchasing any other house, except that it generally does take longer and you may need the lender(s) and/or owner of the "note" to approve the sale. Either because there is no equity or the lender may have added additional fee's on top of the original amount owed. Generally, theses sales are considered "as is" because neither the lender or home owner are willing or able to make any repairs.

A home does not have to be listed in the local Multiple Listing Service (MLS) to be sold prior to the completion of the foreclosure process. If the house is worth less than what is owed on the mortgage, many lenders want to see the property listed so they know that the property has been exposed to the open market and they can be reasonably sure that the offer is at or near the properties current worth or Market Value.

As with any home purchase, you should work with a real estate professional to guide you through the process. There are too many variables in each transaction to answer easily in this forum.
0 votes
Bill Szydlow…, Agent, Tampa, FL
Fri Dec 2, 2011
There are two situations for a pre-foreclosure home. One is the owner is arrears in the mortgage is trying to work out a new payment plan. Because they are behind in payments, they are in pre-foreclosure, until they come to an agreement with their lender. These homes never hit the market, but Trulia and Zillow do show them on their site in order to keep buyers interested in their site and make it seem that they have more listings than the local MLS. The 2nd situation is where the homeowner cannot do a modification of their loan and either list the home for sale with a realtor, usually called a "short Sale", or they do nothing and live in the home for free until the pre-foreclosure becomes a foreclosure and they have to leave. All the short sales are on the MLS, since that is part of the agreement with the Bank, that they list it. The foreclosed home usually takes 2-6 months after the foreclosure happens, to be listed with a realtor for sale by the bank.

Hope this helps. Let us know of any more questions you may have and how we can help you find the right home for your family.

Bill Szydlowski
Web Reference:  http://www.tampamyhome.com
0 votes
Debbi Tinker, Agent, Brandon, FL
Fri Dec 2, 2011
The process is as much about obtaining details about the short sale situation as it is in finding the right home. I agree with Liane, it is best to find a CDPE to assist you as we have had additional training for distressed properties. The process is finding the right home, asking the right questions, making an offer and waiting for an answer from the lender (amount of time varies according to circumstance) and then once lender accepts or counters your offer, you will be given right to inspections and then approximately 35 days to close.

You have to understand that it can be a drawn out process,but asking the right questions before making the offer can make the difference between waisting alot of time and getting an answer in order to close or move on to the right home. I would be happy to discuss with you further. Good luck to you!
0 votes
Alma Kee, Agent, Tampa, FL
Fri Dec 2, 2011
Dear Maldonado,

You should continue searching even if you get a contract on a short sale, preforeclosure property because there is no certainty when or if it will ever get approved to sell at a price you are willing to pay.

I'm seeing higher than market required pricing and have also recently heard that they are encouraging sellers to do a Deed in Lieu instead.

I suspect it may be that they are gearing up to package a lot of foreclosure properties to sell to investors who will be required to rent them out for several years under an agreement with http://www.FHFA.gov

So also consider fixer upper bank owned properties by getting an FHA 203kS mortgage that will allow the repairs to be done to the property and the cost included in your mortgage. You can turn a sow's ear into a silk purse and end up with instant equity.

All the best,
Alma Rose Kee PA
Future Home Realty
0 votes
Mark Zabilow…, Agent, Lutz, FL
Fri Dec 2, 2011
My office is local so perhaps we can make an appointment to meet to discuss in detail and what to expect in the purchase process. We will review step by step and I will let you know of potential pitfalls and we may or may not be able to do to avoid them.
Mark Zabilowicz
0 votes
Liane Jamason, Agent, Saint Petersburg, FL
Fri Dec 2, 2011
Here's a link that fully explains the process for buying a pre-foreclosure (i.e. Short Sale). It's a good idea to hire a Certified Distressed Property Expert to help represent you throughout the process - and as Realtors we are paid by the lender in a short sale. It's not for the faint of heart, but sometimes you can get a great deal in a short sale.

Liane Jamason, REALTOR, CDPE
Smith & Associates Real Estate
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more