by 
The Curious Bag
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Pre-foreclosure is a real estate term used to described a process available to homeowners after they default on their mortgage loan.
Definition
A pre-foreclosure home is a home designated by the bank to be sold at a foreclosure sale on a specific date. Before that date is reached, the home is in pre-foreclosure.
Significance
During the pre-foreclosure period, the owner has time to sell the house himself and pay as much of the outstanding loan as he can.
Conditions
Banks may require that a sale produces net proceeds equal to a set percentage of the appraised value of the house. For the first 30 days into pre-foreclosure, the house must sell at a price that generates 88 percent of the fair market value of the house.
Benefits
Buyers looking to purchase a home can benefit from the low prices of pre-foreclosure homes. Investors can make a great investment in pre-foreclosure housing.
Considerations
Before buying a pre-foreclosure home, do a proper home inspection. Determine the exact condition of the house and its value.
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