Understanding the real estate market is the first step when considering starting investing. Now, after the financial crisis of 2007-2009, when the foreclosure rate in the US reached its peak, people are still afraid of what the future holds.
Even though the foreclosure rate has steadily decreased below 1% after 2010, mortgage owners are still in uncertainty since the mortgage debt outstanding in the US has been gradually increasing as the following chart shows.
However, the market can still provide profitable deals for real estate agents and investors of all seniority levels. In this article, we will explain how the pre-foreclosure process works and the steps you should follow to find the best deals to benefit from.
1-Understand the pre-foreclosure process
A pre-foreclosure is the first step in the foreclosure process. When a homeowner fails to deliver three consecutive mortgage payments, then the bank issues a notice of default, and the pre-foreclosure stage starts.
During this time the homeowner has a period of 2-3 months to pay his debt and reinstate their loan or sell their property before they lose it at the foreclosure. If the owner fails to do either of those two things, the bank proceeds with the foreclosure of the property and sells it at an auction.
Homeowners are willing to sell their properties at lower prices at this stage because there is a risk that if they don’t find a buyer they will lose their ownership and suffer great losses.
2-Find pre foreclosure deals – RealEstateCake
After understanding what a pre-foreclosure is now let’s see where you can find those properties. Generally, houses in the pre foreclosure stage are scarce compared to normal listings. You will need a real estate agent to look for properties listed on the Multiple Listing Service (MLS), while you can, also, find on-market and off-market listings on various sites online.
RealEstateCake can provide you with a website where you have every pre foreclosure listing available. You can download the RealEstateCake App on the App Store or Google Play Store and join the numerous real estate agents and investors who are searching for the best investment deals.
Owners can list their properties for free and with less than $1 per day, you can get access to exclusive deals on the real estate market for every stage at the foreclosure process. The app is the best marketplace for real estate investors and agents that are searching for pre-foreclosures, short sales, tax liens, and wholesale deals.
3-Gather your paperwork
To complete your search you will need to gather the documentation that is needed for the transaction. You will need to find a lender and apply for a pre-approval letter. For every case the documentation may differ, but getting those it’s highly important to begin your transaction.
Now you have an idea of what it needs to start investing in the real estate market. It is essential to fully understand the procedure before taking any initiatives, but once you do, you will get one step closer to a wealthy future.