Pre foreclosure is the term used for a property that is set up for a foreclosure sale but is still to be auctioned. The foreclosure process begins when a homeowner defaults on the home mortgage loan. In such a scenario, the lender issues the homeowner a notice of default (NOD), marking the start of pre-foreclosure period. In this period, the homeowner may try to pay off and regularise the loan, thus retain possession of the home. However, most homeowners who are stuck in serious financial problems may fail to pay off and regularise. The lender issues a Notice of Sale (NOS) - the property will go up for sale at a later date. There is another option that is fast becoming popular - the homeowner can sell the home in this period to a willing buyer at a reasonable cost. This helps the homeowner to avoid a foreclosure sale, something that causes serious damage to the credit scores. Thanks to this route being preferred by lenders as well, who don't want to have a big REO property portfolio that is difficult to manage, property investors and first time home buyers can find great homes for sale at extremely low prices in the pre-foreclosure property market in California.
Investing in pre foreclosure homes can be a great idea, especially if one understands the market to a certain extent and has done ample groundwork. Many a times, the homeowner will be ready to sell his property at quite a low price just to avoid a foreclosure sale (and salvage his/her credit score). Some fortunate and savvy buyers in California have been able to lay their hands on property at 40% discount on the prevailing market value.
To find great pre-foreclosure deals, you must consult and subscribe to a pre-foreclosure list - pre-foreclosure property available in your area can be found this way. BayREOHomes provides an absolutely free service to aspiring homeowners and property investors, and the information is updated frequently. In addition, we offer expert advisory services to facilitate your pre-foreclosure property purchase. We also provide useful information on how to buy such pre-foreclosure properties. However, you must remember that not all pre-foreclosure property is cheap or profitable - inexperienced buyers can end up blocking funds and incurring losses rather than profit. Hence, it is best that the pre-foreclosure market is approached with extreme caution and through experienced players like us. We have years of experience in facilitating the purchase of profitable pre foreclosure property in California.