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What is the term preforeclosure mean in real estate?

A preforeclosure is the time period in which the bank gives notice of default, once the property owner has defaulted on the loan payments. A preforeclosure property exists during the first stage of the legal procedure, and therefore still belongs to the owner. The length of the preforeclosure period depends on the type of foreclosure process mandated by provincial law, and the applicable legal documents the borrower signed with the lender when the property was originally purchased.

Preforeclosure is also the most crucial time in the foreclosure process. It is during this period that you as an investor stand to make the largest profits and can literally make thousands of dollars in months, weeks, days, or even hours! A property owner is willing to let the property sell for well under market value so that they can negotiate a quick closing, thus stopping the foreclosure and ruining their credit rating. A foreclosure can stay on someone’s credit for up to seven years making it almost impossible to get another mortgage in the future. Preforeclosures are seldom seen in the GTA and Ontario and are much more common in provinces and states where there are many more foreclosure sales.  Power of Sale is by far the most common mortgage remedy that banks proceed with in Ontario.

This series of articles is brought to you by A. Mark Argentino and other real estate related resources, including Canadian Real Estate Association CREA and the Ontario Real Estate Association OREA. Back to list of Real Estate Helpful Articles

Whether you are interested in a Power of Sale Property, a Foreclosure Sale or a regular property purchase, I can assist you with all of the complexities when you purchase or sell your next property.  Please don't hesitate to email me If you have any questions or require further information, please send me an email. Thank you, Mark Argentino Read about Power of Sale, Bank Sales and Foreclosure Properties FAQ's Read a very detailed section about Power of Sale and Foreclosure or go back to list of Real Estate Helpful Articles