You will need to do quite a bit of research if you plan on finding a good home or property for a bargain price. If you feel some ethical concerns about purchasing foreclosure homes, you may be interested in purchasing pre-foreclosure homes. This involves buying a home or property before the lending agency takes it over from the homeowner. You would be working with the homeowner when negotiating the sale.

Pros of Pre-Foreclosure Sales

There are many advantages to buying pre-foreclosure homes. Since the homeowner needs the money quickly, only a small down payment is needed. You should not be pressured for time and can inspect the home thoroughly before any money changes hands. You can save as much as 40% on the value of the home. Pre-foreclosure sales contracts can normally be customized for your satisfaction.

Cons of Pre-Foreclosure Sales

One con is that you will probably not be the only person interested in purchasing the property. That means that your competition to buy the home in question might be as stiff as it can get on the normal real estate market. If an third parties have liens on the home, you will also have to deal with them when you go about making plans to purchase the property.

Finding Pre-Foreclosure Sales Lists

In order to find lists of these types of properties you will need to conduct some research of your own. You will have to have a state and county where you would like to purchase the property in mind and then visit that county's courthouse. The public records in the courthouse that are marked "lis pendens" are what you are interested in; it means that the loan for the home has been defaulted on.

When you locate a potential address, contact the homeowner and the lender. Be as polite as you can when you call the homeowner; he or she is under a lot of stress. You need to find out if the homeowner is willing to sell. If the answer is yes, then you need to call the homeowner's lender to find out how much is owed. If you buy the pre-foreclosure home, you will be taking over the mortgage payments where the original homeowner left off.