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These special houses are available to buy because the owner has defaulted on the home loan, and is in danger of getting their house repossessed and sold via an market by a lender. Except the homeowner may find a way to come up with the remaining amount of debt owed on their loan, the sale will be used by the lender like a method of gathering. Several homeowners seek to sell their homes once they go into default, to keep this from happening. A foreclosure sale could damage a homeowner's credit, as well as their likelihood of ever getting another home-loan, so they will often be very willing to sell their property to avoid it.

Pre-foreclosures can be very desirable to investors and homeowners, because the manager will often be willing to undersell their home simply to raise enough money to cover their debt. Since the amount owed is usually much less than the entire value of the home, homeowners usually have the ability to work out mutually beneficial handles homeowners that will make them large discounts on purchase. Sometimes, the only difficulty is finding pre foreclosed domiciles, but that is where will help.

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