- The three types of foreclosure sales are pre-foreclosure, foreclosure auction and post-foreclosure. Each type differs according to its position on the foreclosure timeline and the property owner at the time of sale.
- A pre-foreclosure sale is negotiated with the tenant before the property goes into foreclosure. A foreclosure auction is conducted through a clearinghouse, and occurs after notice of foreclosure. A post-foreclosure sale is negotiated with the bank after it has taken possession of the property.
- Different stages in the foreclosure process offer different advantages for potential buyers. There also are varied levels of risk and sophistication related to each stage.
- A pre-foreclosure sale requires specific tact since you will be dealing with a defaulter who is undergoing a great amount of stress. Foreclosure auctions are the most difficult and risky option, due to the legal status of the foreclosure in this stage. Post-foreclosure sales are the quickest and easiest way to purchase foreclosed property, but yield the lowest potential return.
- Although the foreclosure process can be painful for the defaulter, it is possible to negotiate an agreement that benefits all parties in the pre-foreclosure stage. Negotiating a purchase in this stage can help the seller avoid damage to his credit rating, and can potentially produce a profit for both sides.
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