Pre-Foreclosure Buying Checklist
When a property is in pre-foreclosure (NOD, LIS), the owner still has the opportunity to remedy the loan default and stop the foreclosure process.
The pre-foreclosure period can last several months, or can be as little as 21 days. Each state has its requirements regarding time of this pre-foreclosure and foreclosure period.
Check Foreclosure Laws relating to the state in which the property is located.
The process to buy pre-foreclosure [NOD, LIS], or before foreclosure:
First call the Trustee listed on the Default Notice to ascertain whether the property is still in default.
Contact the owner and let them know of your interest in the property. Tryu to arrange a meeting with the owner to discuss a possible sale and to get a better look at the property. This may take a number of attempts, so be patient and persistent.
Determine The Profitability
To determine how much you will pay the seller for the home, you need to calculate the potential profitability by subtracting the following items from the estimated 'after repair' market value of the property:
Making An Offer
If you reach an agreement with the owner, you will need to ensure you remedy the loan default and satisfy any other liens.
Not all properties in a pre-foreclosure stage (NOD, LIS) are necessarily for sale. The owner may be pursuing other options to cure the default. In spite of this, an offer from a pre-qualified cash buyer may be the best solution to prevent the impending foreclosure.
You can make an offer to the owner right up to the scheduled auction.