Preforeclosures are bought before the sheriff sale.
Forclosures are bought at the sherrif sale.
REO are bought from the lender if they take the property back after auction.
There are a wide variety of fundamentals in all of them, they are truly three seperate breeds. Because your questions are so broad, you will need to do a little homework yourself to distinguish the differences. You will find many answeres to your questions by reviewing old post on this board or simply buying a book or two on the subject from Barnes & Noble or Borders!
1) Pre-sale: commences when the lender files a notice of default (or lis pendens) in the public record coupled with a foreclosure complaint. This starts the lawsuit.
Pros: you have a bit of time (which varies from state to state) to negotiate directly with the seller, have the most time to negotiate your terms (sub 2, all cash, obtain financing). You also have the opportunity to inspect the house. Can make a good bit of money.
Cons: sellers in denial, may be hard to track down or work with.
2) Sale (Judicial or Trustee): Pros: can get some great deals. Cons: very competitive, need cash or access to cash for purchase price, must do your homework in terms of title beforehand, no opportunity to inspect the home
3) Post-Sale (REO): property gets taken back by lender (becoming an REO or real estate owned). Pros: can get a great deal, motivated seller (houses show as a liablity on the lender's balance sheet) Cons: many of the good deals will get snatched up before they become an REO but you can still find some good ones.
Hi Chrishette,
Preforeclosures are bought before the sheriff sale.
Forclosures are bought at the sherrif sale.
REO are bought from the lender if they take the property back after auction.
There are a wide variety of fundamentals in all of them, they are truly three seperate breeds. Because your questions are so broad, you will need to do a little homework yourself to distinguish the differences. You will find many answeres to your questions by reviewing old post on this board or simply buying a book or two on the subject from Barnes & Noble or Borders!
Best of Success!
BAMZ
Heres a quick down and dirty answer to your question:
There are essentially 3 stages to foreclosure:
1) Pre-sale: commences when the lender files a notice of default (or lis pendens) in the public record coupled with a foreclosure complaint. This starts the lawsuit.
Pros: you have a bit of time (which varies from state to state) to negotiate directly with the seller, have the most time to negotiate your terms (sub 2, all cash, obtain financing). You also have the opportunity to inspect the house. Can make a good bit of money.
Cons: sellers in denial, may be hard to track down or work with.
2) Sale (Judicial or Trustee): Pros: can get some great deals. Cons: very competitive, need cash or access to cash for purchase price, must do your homework in terms of title beforehand, no opportunity to inspect the home
3) Post-Sale (REO): property gets taken back by lender (becoming an REO or real estate owned). Pros: can get a great deal, motivated seller (houses show as a liablity on the lender's balance sheet) Cons: many of the good deals will get snatched up before they become an REO but you can still find some good ones.
J
Great summary jorge!
BAMZ