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Home Buyers
The housing market is currently involved in a significant correction, but that doesn’t mean it isn’t a good time to buy. The state of the current market may be abysmal, but the advantage of property is that it is and will always be a stable long term investment. Just because the situation has lead to a decrease in prices does not mean that purchasing a house now is going to lose you money. Onto the list:
1. Interest rates are low. Interest rates have been lowered substantially over the last year, making it easier for you to finance your purchase at a lower price, assuming you have a good credit score.
2. The surplus in houses is short-lived. Population grows, its just unavoidable, so the short term surplus of houses can be seen as a temporary sale that will end as soon as demand returns to its earlier levels.
3. Foreclosures will bring down prices in neighborhoods. While this problem may hurt those whose neighbors’ homes are foreclosed, it means that you will get a much better deal for your purchases. You can even purchase foreclosures if you want a little more risk and the potential for a lot more reward.
4. You can rent it out. A home is an asset that will keep giving back, so even if you purchase it as an investment the rent should help cover the long term costs. Rent has continued to go up even as the housing market has become depressed, this means money in your pocket!
5. You may get tax relief. The Congress is currently debating bills that would attempt to stimulate the housing economy, meaning you might get a tax break when purchasing a new home, making it an even better deal.
6. Property is always a reliable investment. Property will always earn back its value, making it a great way to safely invest.
7. You can start building equity. Equity means you will get lower interest rates on future loans and are generally considered a safe investment compared to others.
8. Home improvement is cheap. Or cheaper than it used to be, the turnaround on the housing market has shrunk the market of jobs for contractors, meaning you will likely be able to get them for cheaper and get more done.
9. You will have a greater voice in community affairs. Because home owners are more trusted to be sticking around and thus are listened to more. This is a great way to get involved.
10. You can decorate the house however you want. Having the freedom to decorate your house with a garden or a new paint job will allow you to live in exactly the space you want, instead of what someone finds acceptable to rent out every year.
Posted: May 16th, 2008 at 3:36 pm |
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Posted in
Home Buyers
When purchasing a foreclosed home, a lot of buyers expect the process to be simple and a guaranteed way to make money. Unfortunately, there are a lot more nuances to the value of a foreclosed home, and in many cases buying a foreclosure can come with endless headaches. So just what are the up and down sides to purchasing a foreclosure? It depends on what stage of foreclosure the house is in.
If the original owner is still living in the home and has missed payments, but is trying to sell as quickly as possible, there are numerous advantages. The reality of this type of purchase is that you are going to get the house below market value, perhaps substantially so. But there is a problem here, if the market value of the home has fallen below the purchase price, then the seller may not be able to make back what they purchased the home for, which means the sell price may need to be approved by the bank. Still, overall the advantages for this type of purchase are high, the seller will often cover your closing costs, you will be able to get inspections done, making it only slightly more complicated than a normal purchase with a significant price incentive. You will, unfortunately, still have to wait for the individual to move out. If the property is being short-sold, you will also have to deal with processing time for the bank to approve the sale, which is all the more difficult with the increased number of these homes on the market.
Buying foreclosed properties themselves is somewhat more complicated. Your purchase will have to be made in cash at the auction, which helps reduce the number of people interested in such properties, but which is a challenge for someone without access to the capital. Buying at auction or after comes with a number of other problems, homes are sold as-is and the price does not include repairs. The paperwork can be a major problem, and the bank won’t be able to give you any history of problems with the home. Of course, you are generally getting the home at as low a price as possible, but don’t expect the house to be so cheap as to be worth the trouble, only a small portion of foreclosures are worth taking the added risk.
Posted: May 16th, 2008 at 3:37 pm |
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