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.

- Auctions can be either overwhelming or lead to egotistical or emotional decisions.

- 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.

Always check to make sure that the pre-foreclosed home you?re interested in has no liens or judgements against it. You should also bring along someone to inspect the home for you so you?ll know of any problems it may have. The risks in purchasing a pre-foreclosed home are similar to purchasing a home the traditional way, only a lot less expensive! You can even resell the pre-foreclosed home for more money than you purchased it for.

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.

A lot of times the banks don’t want to deal with having to foreclose a home, so they will allow the owners to sell it during the pre-foreclosure period. You can get a great bargain in buying a pre-foreclosed home.

Here are some of the reasons many real estate professionals prefer purchasing a pre-foreclosed properties rather then waiting until they reach foreclosure:

- 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.

- You won?t have to worry about things becoming hectic like they would at a government auction.

- More time to evaluate financial scenario then at an auction.

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

- You can bring an inspector along with you to inspect the pre-foreclosed home. You will be given more time to have it looked over.

- You don’t need all the cash up front like you would at an auction. You can pay a down payment for as low as a few hundred dollars!

As with any house purchase make sure you check for any judgements, or liens against the estate. Bring along someone how is familiar with buying real estate and if possible have the house professional inspected. The risks are comparable to a traditional type of home purchase but with the advantages of foreclosure discounted pricing.