Government Auctions - Difference between Preforeclosures and Foreclosures

By Dianne Corbet

Most people in the US are aware of the current real estate crisis and the unsettling fact that many people are losing their homes to foreclosure. Before a home is in the process of becoming foreclosed, it is in the pre-foreclosure stage. The pre-foreclosure period can last anywhere from a few weeks to a few months, and is considered by many real estate investors as the absolute best time in which to negotiate the purchase of a home.

Many of the 'for sale by owner' signs that you see are from owners that are in pre-foreclosure. The bank usually allows the homeowner time in which to try and sell their home before it is foreclosed. This is common because the bank is not in the real estate business and would prefer the current owner sell the home to cut their losses rather then having to seize the home themselves.

Many Realtors agree that buying a pre-foreclosed home is an excellent idea. Here are many advantages to buying a pre-foreclosed home from a homeowner rather than a foreclosed home at a government auction:

- Pre-foreclosed homes are sold for less than foreclosed homes. A homeowner will sell their pre-foreclosed home for low cost so they won?t have to face foreclosure.

- Since you won?t be at an auction, you will be given more time to talk to the home owner about any questions you may have concerning the house.

- Typically less competition then at a foreclosure auction where there is multiple bidding for the same property. Foreclosures attracts more of the mass real estate market then pre-foreclosures does.

- You won?t have to worry about becoming frustrated from losing a bid.

- You will be given more time to access and evaluate your finances before buying a pre-foreclosed home.

- You have more time to have a pre-foreclosed home inspected than you would at an auction. You will be aware of any potential problems the house may have.

- All you?ll need to buy a pre-foreclosed home is a down payment for as low as a few hundred dollars. At a government auction you would need the entire amount in cash.

Make sure you bring along an inspector when you check out a pre-foreclosed home. You should also check to make sure there are no past judgement liens or unpaid taxes on the property. The risks in buying a pre-foreclosed home are about the same as buying a home the traditional way through a real estate company, but there are a lot more advantages! You can even buy a pre-foreclosed home and then resell it for twice as much! - 23196

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Read descriptions on the top pre-foreclosure sites to understand what they have to offer at government auctions review or go direct to preforeclosures