Question:

Why investors go for a pre-foreclosure short sale?

Answer:

A pre-foreclosure short sale is the way to obtain the best real estate deal. A pre-foreclosure short sale may get you 20 to 50% discount on the value of the property. Why is that?

A pre-foreclosure short sale is part of the foreclosure process. A foreclosure process includes pre-foreclosure, auction and bank-owned REOs. Every stage can be very profitable to the investor if they are acquainted with the foreclosure process.

The pre-foreclosure short sale allows for a great level of return. The discount that is possible to earn is up to 50%. However, not always lenders agree to pre-foreclosure short sale. The pre-foreclosure short sale is used when the seller is not yet in default but knows they will not be able to make payments soon enough.

The auction stage is even more lucrative than a pre-foreclosure short sale. At the foreclosure auction, investors can get properties with up to 60% discount.

The lender owned REOs are properties purchased by the lender, repaired and freed from mortgage and tax liens. REOs can usually get you no more than 15% discount. That is why the pre-foreclosure short sale and the auction are the favorite ways for investors to make high profits.

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