Pre-foreclosure Investing--The Seller and You

As an investor in real estate, you may find yourself facing the moral dilemma of whether you are taking advantage of another person's misfortune or helping him/her out of an untenable situation. Sometimes people get into financial trouble through no fault of their own. They may find themselves on the brink of disaster, unable to pay off unsecured credit and falling behind on mortgage payments. They may not see a way out.

In general, homeowners will do everything they can to protect their largest investment--the equity in their home. They'll try to sell the property, have yard sales, take on extra jobs, and try to find someone, anyone, who can get them through to the other side. This is a very difficult time for homeowners and their families. They are often confused and scared, and they may feel that they have failed in life. Time is working against them. They may even begin to feel that there is no hope for them.

Foreclosure Options

People in this situation need to know what their options are, and how to move on successfully. If their home or property has been on the market for a long time, they will most likely consider any offer seriously. But they really need to know what they're facing. While you see this situation as a financial opportunity--the seller sees it as a disaster. You can, however, provide information that will allow the homeowner in trouble to see that s/he still has options, and that s/he can rebuild a solid financial future.

Remember, chances are very good that the homeowner knows s/he is going to lose the accumulated equity in his/her home. Your intervention can help the seller to avoid the additional loss of good credit due to bankruptcy. There are thousands of people out there who lost both and have had to struggle for years to get back on track. Getting out from under by selling to you and doing so with an intact credit record may be the only viable solution for the homeowner.