Hello, I was just wondering what is the major difference between Defaultes, pre-foreclosures, foreclosures, and how can you these be used for a wholesale/short sale deal? Thanks.
This depends on where you live as to the exact process.
In judicial states such as PA, if you go 90 days behind on your payments, you’re in default.
The bank then files action in court for permission to sell, in PA the HO is issued an ACT 91 notice, from this point on, they are in preforeclosure.
The process then take its course through the courts and ends up at the sheriff’s sale. This is the moment of foreclosure itself.
Foreclosure homes should really be called foreclosed homes, they are past that point after the auction.
At the auction, the opening bid is (almost) always placed by the bank for the amount owed. If no-one else bids, the bank owns the house. It is then called REO (Real Estate Owned).
The bank then passes it to a broker or realtor and tries to sell it.
You buy low and sell high, That’s how the system works.