A lis pendens foreclosure is a property that has a pending suit against it. A lis pendens notice could indicate that the title to the property is in question or that there is some lawsuit against the property, which might be due to non-payment of mortgage or taxes. The annotation of a lis pendens serves as a notice to the public that such property is involved in a suit and cautions the public to examine the property further before entering into or closing any deal.

What Lis Pendens Could Mean

Many property buyers, especially those who still have very limited experience in foreclosure investing, regard lis pendens as a discouraging factor in buying a real estate foreclosure. For them, a lis pendens creates inconvenience and uncertainty over the title of the property and makes it difficult for them to obtain mortgage loan on the property.

For other buyers, a lis pendens foreclosure can also be a costly investment as there is a great possibility that the litigation period could stretch into a long time that the prospect of doing anything productive on the property diminishes. Also, it could impede the introduction of developments on the property as the title is still in question and the balance could tilt either way.

On the other hand, there are investors who particularly look for a lis pendens foreclosure that they can invest in. For them, there are opportunities to be had from such properties. For one, a lis pendens foreclosure generally sells for much less than an ordinary foreclosure, usually pegged at 50 percent below their actual market values.

Investors are also aware that there is a big probability of finding pre-foreclosures that are located in premier locations, but at relatively cheaper prices just because their owners are eager to sell them quickly.

And since pre-foreclosures stay in the market for a substantial period of time, investors have wide room to negotiate for a lis pendens foreclosure with the home owner before the sale date. Those who know how to bargain can expect huge instant savings and equity from a pre-foreclosure purchase.

The rule to follow when confronted with this opportunity is to always observe extreme caution and utilize all your available resources to investigate and examine the property before you purchase. Weigh your options as well as the pros and cons of a transaction before you go in any further. Remember that foreclosure investing could either mean thousands of dollars in profit or losses.