The real estate market gets more and more competitive every year, and it isn’t difficult to see why this happens. Property investment is a great way to make a return if you are willing to put the work into understanding how to best monetize each investment. Suppose you want to stay ahead of the competition in 2022. In that case, you will need to look beyond regular listings and into places like pre-foreclosure lists, auctions, and other methods of finding properties outside the traditional marketplace listings.
What is Pre-Foreclosure?
The pre-foreclosure phase is one of the first steps in repossessing property and recovering the cost of a loan in default for lenders. It is designed to give the property owner a chance to save the investment so that homeowners are allowed to salvage the situation and avoid a total loss.
This period can also allow the homeowner to act by selling the house to get out from under the debt while salvaging some portion of the down payment. Many people take the chance to move into a less expensive setting even if the sale only covers the loan costs because that can help change an underwater financial situation.
Where Can You Find Pre-Foreclosure Listings?
Every county clerk’s office maintains a public list of pre-foreclosure properties that you can check on to know what is available in your area. There might be a printing fee, a minimal one, but often there is not. Of course, if you want to find lists from many locations at once or from areas far away, you need an alternative.
Using real estate lead software that incorporates public record data like pre-foreclosure listings alongside skip tracing data that helps you find contact information for owners can be your alternative. BatchLeads is an excellent example of such a platform. Additional integrated tools allow you to connect and close the deal when you are interested in buying pre-foreclosure real estate.
Pre-Foreclosure vs. Foreclosure
There is a big difference between shopping the pre-foreclosure list and buying a foreclosed property. When real estate goes into foreclosure, the lender is formally beginning the repossession process. The homeowner is evicted and can no longer sell the property, and the lender usually disposes of it through an auction.
Pre-foreclosure is when the loan is in default, and the lender has notified the homeowner of such. During this phase, the owner may not decide to sell the property. It may be possible to refinance the house or get a private loan from a family member. This final chance to recover some value from the property does tend to motivate homeowners to sell; it’s just no guarantee they will respond positively to the idea.
Benefits of Investing in Pre-Foreclosure Properties
Apart from investors shopping for properties that do not appear on the MLS, what are the benefits of buying pre-foreclosure houses and commercial properties?
- Prices that often fall below the retail market
- Opportunities for wholesaling as well as other investment methods
- Motivated sellers are usually ready to negotiate if they can get what they need from a sale
- Toeholds in high demand communities with rapid market turnover
With all these benefits, it makes sense to at least look at local pre-foreclosure properties while you scout other leads.
Steps to Investing in Pre-Foreclosure Properties
Closing on a pre-foreclosure sale is not complicated, but it does take a certain finesse to open negotiations on what is usually a cold call.
1. Sign up with a lead generation and management service like BatchLeads to search remotely for pre-foreclosure properties with map tools and built-in skip tracing
2. Use the search and map view features to make a list of properties you want to see in person, then plot out a driving tour to see the buildings for yourself
3. Save leads you like and use the built-in tracing tools to find contact numbers
4. Reach out via your preferred marketing medium with a carefully crafted message
5. Negotiate to close the deal, but have your capital ready to move quickly
After that, it’s all over but the closing. Remember, working in volume is the key to finding leads that turn into sales.
Investing in Pre-Foreclosure in 2022
With the boom in real estate investing hitting the entire country now, you can expect the market to heat up even in hard-to-spot corners like this. Be ready to move quickly and to work your lead lists in volume, with the best tools you can find like BatchLeads.