Wholesaling a Pre-Foreclosure?

[Jonathan Tang]

Hey BP!

Pre-Foreclosures are a niche in my market because there are so many of them. It's a perfect scenario for motivated sellers as they're already in a desperate situation most of the time...

I know the process of wholesaling a house but is there a difference on wholesaling a

Pre-Foreclosure property instead of a regular property? I live in California which is a

non-judicial foreclosure state! Any help is much appericated!

Thanks!

[Elizabeth Wilson]

@Jonathan Tang -  I thought the exact same thing when we bought our first foreclosure 5 years ago!

I never want to squash someone's dreams in the REI world but here is what I've learned after spending many years marketing to pre-foreclosures and buying foreclosures:

If they are in pre-foreclosure, they either owe too much to sell it to anyone, are currently trying to work it out with the bank, are in absolute denial, or actually want the house to be foreclosed on due to other reasons (divorce being the most often cited).  I've yet to actually get a seller to sell to me before foreclosure so we quit even marketing to them and just waited until auction date and bought it then.

Also I don't know the legalities of putting a pre-foreclosure under contract if you are not able/willing to close on it.  Now if you can take out down yourself regardless of finding a buyer, then you are safe, but otherwise there may be legal repercussions the homeowner can take against you.

I've also been told that some smart homeowners might want the house to go to auction because they will end up with the difference which could be more than they'd get if they sold other ways.

Just my experience and 2 cents.

All the best!