Everyone dreams of owning their own home. We all love to have our own space and privacy, but nothing in this world is ever a guarantee except living and dying. Circumstances change, and you could be facing a pre foreclosure. You may have saved a very long time to buy the home of your dreams and you may have lived in that home for quite a while, but things have changed and you can no longer make your monthly mortgage payments. This article will give a few pre foreclosure tips that might be of some value to you.

None of us like to think of losing our home we so much love, but sometimes the inevitable happens. You are now facing a pre foreclosure. Maybe someone has died, or you become sick or disabled and can’t work. Maybe you lost the job that you thought was secure. Whatever the circumstance, the bank has let you know a pre foreclosure is in effect. A pre foreclosure is the amount of time a lending institute will allow you to get back on your feet before they are forced to foreclose on the home.

For whatever reason, when you can no longer make the payments on your home, don’t give up. Things are not hopeless. Banks don’t want your home. In fact a pre foreclosure is for that very purpose. They don’t benefit from taking your home. They are giving you time to try and get back on your feet or make some kind of arrangement to sell your home. You may not be able to keep your home because you can’t make the payments, but a pre foreclosure allows you to try and sell it yourself.

Most people go into a mode of not answering the phone and feeling sorry for themselves. The bill collectors can be relentless, but stay in touch with your mortgage people. They give you the pre foreclosure to allow you to get things in order. They will work with you as like I said, they really don’t want your home. Place your home on the market to sell when you get a pre foreclosure notice, and you know you are going to lose the home back to the mortgage company. If you can sell it, you can clear up some credit as well as possibly make some money too. Just keep in mind that a pre foreclosure won’t last forever so don’t over price the home, just try to break even if you can.

You have seen all of the advertisements where merchants are hawking their products to help you profit in the home Bank REO Foreclosure market. What they don?t tell you is that not every home in Bank REO Foreclosure is quite the bargain that they would like you to believe it to be. Specifically, if a home is being foreclosed in a market that is hot, you won?t find as near a great bargain as you would in an average housing market. Yet, you can profit from a pre-Bank REO Foreclosure purchase even in the hottest housing market, so read on for some helpful tips.

You would think that a distressed homeowner would dump his property in a hot housing market before things get out of hand. Unfortunately, not every homeowner acts so quickly and the home is taken out from underneath him before a sale can be arranged. When this happens, the bank will look to dispose of the property very quickly and will likely still make a profit in a strong market. However, the homeowner could end up walking away from a Bank REO Foreclosure with very little cash on hand.

Many homeowners are finding themselves in a heap of trouble today, just three or four years after buying their home. Because they elected to get an adjustable rate mortgage, that monthly payment will suddenly spike by several hundred dollars once the adjustment period kicks in. For the homeowner living on the edge this spells trouble ? in many cases they will not be able to refinance either as their credit is suspect or a drop in income has made them too much of a risk for a new loan. Either they?ll have to make good on the current loan or hope that a buyer steps forth to bail them out.

By the time some homeowners take action, they could be several months behind on their mortgage and a Bank REO Foreclosure notice may have been served. In many jurisdictions you can learn about a pending Bank REO Foreclosure through legal notices in newspapers or by visiting the sheriff?s department to read legal notices there.

Again, because the housing market is hot, you won?t find quite the bargain you might find elsewhere, but you could still profit from the situation. If the home has jumped in value by 25% since its purchase you could still offer a price of 10 percent below its value and make a nice deal. You?ll offer enough money to cover the mortgage and the owner could walk away with a small profit as well. Next, you could market the home and attempt to receive offers above the asking price. In a hot housing market you can do this so that is where most of your profit will likely come from.

Finally, if you aren?t in a hurry, you could hold onto the home for a year or more and sell it at even greater price as long as the local market trends are pointing upward.

The advantage to buying a property at a Bank REO Foreclosure auction is that you can often pay far less than you would have under normal circumstances. Frequently you can invest in improvements and then sell the home for a much higher price than your cost.

The disadvantages and risks are more numerous. Simply to participate in the auction you must have sufficient funds available (either cash or a cashier?s check) to cover 10% of the purchase price. You also must be able to arrange for financing within thirty days to complete the purchase or you risk losing your deposit. Next, you?re buying the property as-is, without inspection. The condition of the interior of the home is usually a complete unknown. You?ll have to be sure that the price you pay is low enough that you can still afford to make significant improvements or repairs.

Buying at pre-Bank REO Foreclosure has two main advantages over buying at a Bank REO Foreclosure auction. The homeowner may be desperate and may be willing to do almost anything to avoid actual Bank REO Foreclosure. In addition, you can enter the property to inspect it before purchasing, so you?ll know exactly what you?re purchasing. For those reasons, pre-Bank REO Foreclosure investing is a wave many real estate investors are now riding.

Let?s look at the pre-Bank REO Foreclosure process. Pre-Bank REO Foreclosure purchases are in many ways similar to a normal real estate purchase: you negotiate with the homeowner, sign a contract, and proceed with the transaction. The main difference is that instead of the homeowner listing the house for sale (and thereby being willing to sell), you?re finding potential homeowners to contact in order to try to buy their house, often when they?re under duress.

You can easily find homeowners in the early stages of Bank REO Foreclosure by checking public notices. You can also go to the county clerk?s office and read the postings. A public notice in the newspaper will list the bank?s attorney. You can contact the lawyer for information.

You can also contact the bank that originally made the loan and speak to someone in the bank?s delinquent mortgage department.

Or, if you choose to, you can also contact the homeowner directly to attempt to purchase the property. Keep in mind, though, that in all likelihood the homeowner has already been contacted by real estate agents and other investors. If you?re interested in buying the home to live in, you may stand a better chance because homeowners in financial difficulty are likely to feel that investors and agents are out to ?steal? their home.

With a little research, you may find a homeowner willing to sell their home at a bargain price. There are as many reasons for Bank REO Foreclosure as there are individuals, but people facing Bank REO Foreclosure fall into several broad categories. Let?s take a look at a few of them so you?ll understand the situations you can be dealing with.

? Absentee husband or wife: If one or the other party has left the relationship (and possibly the area), a transfer of property requiring both signatures simply won?t happen. Banks facing situations like this know that the Bank REO Foreclosure process will take a long time, making them even more eager to sell the property if it eventually does become bank-owned. If you choose to, you can keep in touch with the bank and monitor the progress of the Bank REO Foreclosure. Eventually all formalities will take place, and a sale will take place? but not at the pre-Bank REO Foreclosure stage. Instead it will occur at the auction or bank-owned stage.

? Businessperson facing business collapse: If a business owner?s once-promising venture is failing, your offer to buy the property may be of interest. After all, you?re offering the individual a way out that is more socially acceptable than Bank REO Foreclosure. Business owners typically are more realistic about cutting losses, selling assets, and making other rational business decisions, no matter how personally painful. You won?t know, of course, whether you?re dealing with this type of person until you call and they offer the reason why they?re in Bank REO Foreclosure proceedings? and the average homeowner probably won?t be forthcoming.

? Fiscally irresponsible homeowner: Easy credit has made many individuals ever-hungry consumers… as long as people will permit them to keep consuming. At some point the parties that extended easy credit want to be repaid, and the homeowners find themselves in financial trouble.

The main difficulty is identifying all the possible obstacles to purchasing the property. The homeowners can possibly have other judgments against them. They may not be honest and straightforward in their dealings with you ? a great reason why you should always use an attorney to help you with any real estate transaction.

The upside, of course, can be huge. Buying pre-Bank REO Foreclosure properties can be a great way to obtain properties at bargain prices, and with a distinct advantage over buying auction properties: You can fully inspect pre-Bank REO Foreclosure properties. Remember, the biggest unknown involved in buying auction property is the condition of the house ? since you can?t inspect it before purchase, you have no real idea what it looks like inside… and in some cases you?ll be in for a nasty surprise after you?ve purchased the property.

When you buy a pre-Bank REO Foreclosure property you can inspect the house, and if necessary bring a contractor in to provide an estimate, and create a detailed and accurate summary of the cost (and time) involved in refurbishing, rehabbing, or improving the property.

In effect investors purchasing real estate at the pre-Bank REO Foreclosure stage can make an educated assessment of the investment potential in each property ? buying pre-Bank REO Foreclosures eliminates the guesswork.

Mark Sumpter is an investor who is also an expert in the field of buying and selling pre-Bank REO Foreclosures. Mark?s website http://www.ShortSaleExpert.com offer 52 free coaching tips related to building wealth in real estate investing and short sales.