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 |
55 Views |
Email Post
|
Help others find this article at:
del.icio.us Digg Furl Reddit Google Technorati
Posted in
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 |
46 Views |
Email Post
|
Help others find this article at:
del.icio.us Digg Furl Reddit Google Technorati
Posted in
Home Buyers
You may have heard that the housing market is undergoing a correction, but what you may not realize is that means the housing market is now saturated. This process of correction has been an adjustment due to the deflating of the housing bubble. Housing prices had risen at unprecedented rates, so buying was an expensive task. Well, with the number of the homes on the market the highest it has been in memory, suddenly the prices are coming back down. This means that the average person is more capable than ever of affording a home. And, because the market is simply undergoing a correction, long term investments in real estate are still completely viable and safe. This means now is a better time than ever to make a home purchase.
You want to be careful, however, as the situation of each house should be evaluated before a purchase. Don’t buy a foreclosure unless you are willing to shell out money to fix it up, because they usually fall into disrepair. Watch out for blocks with a large number of foreclosures, those are somewhat riskier areas to buy in, because a large number of foreclosures all at once can permanently harm a neighborhood. It is a good idea to be thinking at least ten years ahead when buying in a market like this, as it is almost impossible to know how the market will fluctuate in the short term.
Posted: April 9th, 2008 at 11:40 am |
56 Views |
Email Post
|
Help others find this article at:
del.icio.us Digg Furl Reddit Google Technorati
Posted in
Home Sellers,
Home Buyers
Realtors can be a major advantage to a home buyer, and because the commission for the Realtor is covered by the seller, there isn’t a good reason NOT to hire one. This is because realtors know what to look for when it comes to getting process down, and how to manage all the problems that can arise while buying a home. The purchase is likely to be the largest of your lifetime, so you should always have an expert working for you when going into a sale.
Realtors also provide access to listings that may not be available publicly. They have information on the area, zoning laws, school districts, and other pertinent information that should factor into any home purchase. Realtors know more about financing options and can help you get the lowest rates and best plans for payment. The realtor is experienced at closing and knows how to manage all the paperwork. Because of their knowledge and experience, a realtor is an invaluable resource, so don’t go into your home search without one if you can avoid it!
As a home seller, you also benefit from the resources available to a realtor. Realtors are experienced at bargaining, and can easily discover extra value in your home and market it in such a way as to get you more for your property. This is a great benefit, as it allows you to focus on your move, fixing up your house, and getting ready for the sale, while they take care of buyers. They can handle themselves until the negotiating process begins, and that’s when their talents really shine. Of course the best assurance that this process goes well is to make sure you get a realtor who’s going to work hard for you, so shop around and look into who you are hiring before hand.
Posted: April 9th, 2008 at 11:31 am |
57 Views |
Email Post
|
Help others find this article at:
del.icio.us Digg Furl Reddit Google Technorati
