When a property initially enters pre-foreclosure status, the owners typically have two to three months to reinstate the property by paying off their behind payments. If the property is in this status then the owners are in danger of losing their home, any equity in the property and having a black mark placed on their credit record. If the property is on the market, the owner, who is in default on his payments, will use the proceeds of the sale to payoff what is owed on the home.
It will be important for us to find out what is owed on the home. The owner will not be able to sell the home for less than what is owed on the property, unless the owner can write a check for the difference. This is highly unlikely in the current market. The only way the owner can sell the property for less than what is owed, without making up the difference, is if the bank pre-approves a short-sale on the property. The bank has final say on this issue, since the house is what secured the loan.
If the house is worth less than what is owed, which is very likely in this market, the owner will be unable to sell the home, unless somebody makes a foolish offer. The home will then be foreclosed upon and sold on the Fulton county courthouse steps.
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