Pre-Foreclosed homes in Wichita, KS are available in every price range and neighborhood. For investors and buyers who are looking for pre-foreclosure homes, you will find many affordable homes right now. In fact, according to Zillow.com, Wichita home list prices have gone up 1.4% for the period January 31, 2010 compared to the same time a year ago. The median home list price is $129,700 for the period January 31, 2010. This is encouraging for the Wichita market. Zillow reported 119 foreclosures currently in the Wichita, KS area. So if you are looking for pre-foreclosures or foreclosures, now is a good time. Home prices are still very affordable in the area and interest rates are low.
Pre-Foreclosed Homes vs. Foreclosed Homes
Pre-foreclosed homes are still owned by homeowners that are in default on their mortgages. The lender may or may not have instituted formal foreclosure proceedings. However, if the borrower and the lender do not come to some arrangement about bringing the arrearages current, eventually the lender will foreclose on the home and it will either be sold at a Wichita, Kansas public foreclosure auction sale or become an REO (real estate owned) by the bank.
Pre-foreclosed homes are referred to as short sales as well. When you buy a pre-foreclosed home, you are negotiating with the seller contingent upon obtaining their lender’s approval to sell the home for less than the owner owes the bank on their mortgage. The short sale process takes a very long time. One reason is the lenders are overwhelmed with short sales and foreclosures and don’t have enough staff to handle everything. The other reason short sales fail or are delayed is that inexperienced people handling the short sales don’t prepare the paperwork correctly or omit information that the lender needs. If you decide to make an offer on a short sale property, find out who will be handling the process first. It should be the seller’s attorney, an experienced short sale company or their Realtor, providing the Realtor has experience with negotiating short sales. If the seller says they are handling the matter themselves, then I would insist as part of the negotiations that they hire a professional company to handle the negotiations. There is a much higher degree of success when a professional negotiates the short sale.
Advantages of Pre-Foreclosed Homes
Here are some advantages of buying pre-foreclosed homes:
- They are generally in better condition than foreclosures because the owner or a tenant are still residing at the premises and maintaining the premises to a degree.
- Short sales/pre-foreclosed homes are sold at discount prices.
- You can conduct inspections.
- You receive title insurance. When you buy foreclosed homes at auctions you could be stuck with liens, title issues as you cannot get title insurance as well as former tenants or owners on the property that you have to evict. REO’s are different though. You do get title insurance and clear title when you buy an REO from the bank and the properties are vacant.
Where to Find Pre-Foreclosed Properties
You can find pre-foreclosed properties in the Wichita and surrounding areas several ways:
- Work with a Realtor
- Craig’s list
- Newspaper ads
- Drive the area looking for signs
- Various Internet websites
If you do make a decision to buy a pre-foreclosure property, you will need to be patient, especially if you are purchasing a short sale. The short sale process can take three to six months or longer. Cash offers speed the process up a little because you can close quickly once the lender approves the transaction. Sellers tend to accept cash offers on pre-foreclosure properties over buyers that need to get financing because they know the transaction will close. Pre-foreclosure properties are good investments whether you are going to live in the property or rent it out because they are sold at discounted prices like foreclosed and REO properties.