What does Pre Foreclosure Mean?

If you’re a house hunter in Denver, chances are you’ve seen the term “pre-foreclosure” on some of the listings that come up in your search. You might be wondering what this type of property actually is. A pre-foreclosure home is a distressed property that the lender has not yet repossessed and sold at auction. Pre-foreclosure homes are generally still occupied by their owners, who have fallen behind on monthly mortgage payments. The occupants of pre-foreclosure homes will have received a default notice, but may still be working to stave off foreclosure. In other words, a home can be pre-foreclosure and not for sale.

If a pre-foreclosure home is for sale, you’ll typically see it listed as a pre-foreclosure property or short sale on real estate sites. A short sale is a sale in which a homeowner in default sells a home to prevent foreclosure.

If you decide you want to purchase a pre-foreclosure property, you won’t necessarily arrange a mortgage and make a down payment like you would for a normal home purchase. Instead, you’ll cover what the current homeowner owes. That means you’ll be responsible for the loan balance, any liens on the property and any unpaid mortgage and homeowners insurance. You’ll pay those funds to the seller and take over the property from the seller. This process will go more smoothly if you can offer to pay in cash, but it’s not a requirement.

Ideally, you would want your total costs to add up to a total that’s well below the value of the home. Keep in mind that you may also have to cover the cost of repairs to the home. Buying a pre-foreclosure home is an opportunity to pay a lower-than-market price. You’ll also face less competition than you would if you bought a foreclosed home at auction.

Are you ready to start checking out pre-foreclosure options in Denver? Contact Metrowest today! We specialize in these types of sales and would love to help you start the process.

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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