Lis Pendens

Lis Pendens is a Latin term that means "suit pending." It is used to refer to a property that is facing a lawsuit due to some kind of a legal matter, usually one that has got to do with the foreclosure process.

Getting that Lis Pendens status creates several different scenarios not only for the owner of the property, but for the potential buyers as well. To the uninformed, this type of property would seem like a bad apple. It would tend to drive them away and look for other real estate to spend their money and efforts on. Being in this state could trigger uncertainty and hesitation from them as they would think this notice could cause various types of obstacles when applying for a mortgage loan, and such.

Other buyers would also tend to believe that a property being this close to the end of the foreclosure process is not a very smart investment to have. Even though in general, it costs significantly less than other foreclosures, the thought of the possibility of an extended litigation period along the way instills fear to the buyers, whose mindsets become filled with the belief that  doing something profitable with a Lis Pendens is almost improbable. Another scenario that could inject doubt to investors is the hassle the title in question could bring in starting and maintaining an ongoing development to said property.

On the other side of the coin are buyers that take a Lis Pendens as an opportunity-filled investment. They see properties involved in a foreclosure process like this as a cost-effective expense because they are usually sold at about half their actual market prices. They are drawn to how much they would be able to save by buying this property.

As always, when you find yourself in questionable situations such as this one, it is advised to practice caution and spend a lot of time studying, researching, and examining the property before making a purchase.