A Guide to Buying Pre Foreclosures in Philadelphia

The large number of foreclosures in Philadelphia is attributed as being the primary cause of the decline in property prices. Many financial analysts see the market hitting its lowest point soon, with some relief in sight in the near future. This is prompting people to buy homes involved in foreclosure, as they normally sell at discounted prices.

It is important that you gather as much knowledge about the foreclosure process before you start looking for foreclosure houses. A foreclosed home is sold by the lender who held the mortgage on the home. Before a home is transferred to the lender, it is put up for sale at a foreclosure auction. The home owner can also choose to sell the home before the auction, while foreclosure proceedings are still on.

A pre foreclosure sale is when the home owner sells the house before the foreclosure proceedings are completed. The reasoning behind this is that, by selling a pre foreclosure home, the home owner can generally get enough money to clear the debt which gave rise to the foreclosure proceedings. Since this is the main reason for most of the home owners to sell their homes in pre foreclosure, some very good deals can be made when the home owner doesn’t owe much to the lender.

In cases where the amount to paid back is lesser than the home’s selling price, the home owner gets to keep the remainder of the money. This is where you can really bargain. In cases where the amount owed is more than the best offer that the home owner has received, the lender can opt to write off the remaining amount and let the house be sold to the best offer. It is the lender’s prerogative to allow this to happen. A lender would normally do this to avoid the costs that are associated with foreclosure.

While buying a pre foreclosure home, it is highly imperative that you inspect the property in question. Structural damage can be very expensive to repair. Check if all the basic amenities are working. Make an estimate of how much you would need to spend on the house before you make your offer. Professional home inspectors can easily be found to guide to through the process.

Also, go through public records to check if the home has any other loans attached to it or if there are any arrears in taxes.

You can look for pre foreclosure homes in Philadelphia over the internet. Banks are also known to give home buyers lists of home owners who are facing foreclosures (not all banks do this, though). Pre foreclosure listings also appear in newspapers and news letters.

While there might not be much time for you to decide on buying a pre foreclosure home, do try and look at as many homes as you possibly can before picking one.