I found this article in the Chicago Trib.
The writer’s source says that the pre-forc arena is not for the new, only the experienced. Personally I feel that if you never experience something as a newbie, you will never become experienced and will always be a newbie. :o What do you guys think?
http://www.chicagotribune.com/classified/realestate/realestate/chi-0612100284dec10,1,5391207.story
Personally, I don’t mind when articles like these are published. It means more deals for those who are doing it. The message behind the article to me is just to know what you are doing. Obviously if you have no idea what you are doing and do no research you could get yourself into a sticky situation.
It’s like my pappy used to tell me (actually, he still tells me): Use your head.
I scanned the article. I don’t think it says to avoid pre-foreclosures. It says to avoid foreclosures, presumably at auction.
I agree that buying properties at auction, without the benefit of seeing inside or getting any inspection at all, is generally a bad idea for someone starting out.
I would rather buy the property pre-foreclosure when I can deal with the seller direct and see the house inside and out as opposed to buying it on the steps and having no idea what I am getting.
You can buy post-foreclosure, too (REO), but you’re probably looking at a higher price since there are commissions and carrying costs. Also, with the property on the market, there will be more invetors looking at it, some of whom are going to overpay and price you out.