Pre Foreclosures in Chicago a Viable Option

Foreclosures in Chicago are still increasing in numbers. While this is not a good time for home owners going through tough financial times, for people who are looking to buy a house, this is being looked upon as the right time to do so. Since foreclosure homes sell at discounted prices, they should not be overlooked.

Homes in pre foreclosure have been known to sell at close to half their valued market price. While this is not everyday occurrence, homes in pre foreclosure selling at discounts of up to 20% is fairly common place.

A home enters the pre foreclosure stage after the lender serves the borrower with a default notice, which states the lender’s intention to foreclose on the home if the default on the mortgage in question is not fixed in the given time period.

Usually, the home owner can try and sell the house anytime before the scheduled foreclosure auction. By selling the house, a home owner can usually repay the lender, especially if the amount remaining to be paid back is lesser than what the home owner receives for the house.

In cases where the amount that remains to be paid back to the lender is more than the best offer made on the home, the lender can choose to accept the offer and waive the balance off. Almost all pre foreclosures need to be sold in accordance with the lender, more so if the house is to sell for lesser than the money remaining on the debt.

A good thing about buying pre foreclosures is that you get to deal directly with the home owner. This eliminates the need to deal through agents and attorneys. However, if you do want a professional to guide you through the process, plenty of help is available.

While pre foreclosures can offer some great deals, precaution must still be maintained. Since monetary instability is one of the primary reasons for a home owner to sell in pre foreclosure, there are chances that not too much money has been spent on the house’s upkeep in the recent past. A thorough inspection of the house will give you an estimate of what you would need to spend on renovating/repairing the house. This should play an important role in your reaching an offer price for houses for sale.

Any existing secondary liens or unpaid taxes should also be looked into, as once you buy the house, you could become liable for these.

So if you do plan to buy a pre foreclosure home, try and look at as many houses as you can; the more the houses you see, the better the chances of a great deal.