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If you can get in touch with the owner of a pre-foreclosure property before the auction sale, you may be able to work out a deal with the owner. After the notice of default has been filed, there is still time to cure the default and keep the house from going through foreclosure. In some cases, you may be able to buy the home for the amount that is owed on it, pay off the mortgage company and save the owner's credit all at once. You'll come out looking like a hero to the person who owned the home and you'll make a tidy profit too.

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One of the major advantages of buying homes while they are still in the pre-foreclosure stage is that you have the opportunity to see the house while it is still being lived in. It is much easier to inspect a house that has working electricity and plumbing. If you wait to buy the house at the foreclosure auction, you may have little or no opportunity to inspect it before you bid.

In addition to having more time to inspect the property, you are able to catch the property before it has suffered additional damage as a result of the foreclosure process. When a home is vacated by the owners prior to the foreclosure sale, it may become the target of neighborhood vandals. In addition, some owners trash their homes out of anger when they leave.