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An increasing number of families in San Diego are finding it hard to keep up with their homes’ monthly mortgage payments. This is resulting in more and more homes becoming part of the pre foreclosures in San Diego. While this is a bad sign for the home owners, home buyers are viewing this as a good time to buy pre foreclosure homes.
Since pre foreclosure homes are known to offer some of the best deals in the housing sector, the competition to buy them is comparatively higher than in other stages of foreclosure.
A home enters the pre foreclosure stage after its home owner has repeatedly defaulted on the mortgage payments. From this period, until the home is put up for the foreclosure auction, it remains in pre foreclosure. This is the period when the home owner can be approached to buy the house.
A home owner would generally want to sell the home in pre foreclosure to settle the dues on the mortgage in question. This would result in foreclosure being avoided and their credit ratings being preserved. If the amount that the home owner needs to pay back on the loan is less, it would give the home owner the equity that has been invested in the house.
There are instances where, because of the decline in home prices, the amount that the borrower owes on the mortgage is more than the market value of the home. In cases like these, the lender can choose to waive off the amount that is remaining on the loan after the sale. Lenders do this because they would rather incur a small loss at this stage instead of having to foreclose on the property later.
Pre foreclosures often sell cheaply because many home owners are content with offers that relieve them from their debt. In cases where the balance on the debt is low, chances of a low offer being accepted increase.
If choosing to buy a home in pre foreclosure, inspecting the property is a must. You must keep in mind the costs you would incur in renovating the house. This should be a factor in coming up with the offer price. You should also go through the public records of the home to check for arrears in property taxes and secondary liens.
Homes in pre foreclosures can be found on the internet. You can also approach local county courts to get lists of homes that have been served with foreclosure notices. Banks, depending on their policies, could also give you lists of homes in pre foreclosures.
It is best to spend a fair amount of time in looking at all possible avenues before reaching on a decision that involves buying a house. After all, it is not a decision you would have to make everyday; but it is one that you could have to live with, for the rest of your life.
