Foreclosures
Home sweet home at a sweet discount
People are using short term loans, family loans, and credit to get in on the huge foreclosure market. The recession brought about millions of foreclosures throughout the country. In almost every city across the nation homes were turned over to banks due to the faltering economy.
Though that was bad news for the homeowners who lost their properties, it was great news for investors. Now that the recession is over and the market is leveling off, many people are looking to capitalize on foreclosures by picking them up at bargain-basement prices.According to REMAX, in the US there are about 411,000 foreclosed properties available for purchase.
If you are looking into foreclosures, there are some things to remember. Robert Jenson, owner of Jensen Group at REMAX Central in Las Vegas, said, “Buying a foreclosure is definitely a bit of a grind. It is not easy. You are getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want.” Jenson is an expert at the foreclosure purchase process because of his location. He’s in the heart of Las Vegas where over 80% of the homes being sold are classified as “distressed properties.”
First steps
The first step to finding the perfect foreclosure is to do a lot of homework. Elaine Zimmerman, a Memphis-located real estate investor, said that hopeful buyers should look to websites that target foreclosure listings. They should also look for the keyword “REO”, or real estate owned, meaning owned by a bank. This means the home has been foreclosed and the lender is now trying to sell it.
Zimmerman notes that these websites will most likely point buyers to the right realtor, not necessarily the right home. She says, “A lot of these realtors have a long-term relationship with these banks, and they know of listings that haven’t even come on the list yet. Call them about the listings that you are interested in, but also ask them about listings that may be coming up because sometimes it may take a day or two or even a week before a listing actually comes into the database.”
Next steps
So now you’ve found a home and it’s time to get serious. Here are the next cautionary steps to take as you move forward to homeownership.
1. Get preapproved for a mortgage. This is critical because it shows your real estate agent and the owner-bank that you are a serious contender for the property. Things are competitive in the foreclosure market and banks normally want to sell the properties quickly. Being preapproved can give you a notable head start on other buyers.
2. Remember that foreclosure sales are “as is.” Be sure you have the needed cash to make your foreclosure property livable for you or for a tenant if you plan on renting. Know how much you need and use short term loans, savings, or family help to set aside money for the express purpose of renovations and repairs. Remember that if people didn’t have the money to keep the home, they probably didn’t have the money to maintain it, either.
3. Find an agent who knows about foreclosure sales. Foreclosure sales can be tricky. You want an agent that knows the ins and outs of the market. Normally a bank will use only a few selected agents to sell its properties because they know all the small details of the transactions.
4. Gauge how long it will take to sell your home. If you own a house now and will have to sell it to buy another one, take a look at your specific market and see how long homes in your area have taken to sell. Compare those homes with your home and those prices with your price to get a better idea of what the market may hold for you.
In conclusion
Foreclosures are a great market to get into. There is enough inventory right now that you can get a truly great price for a home. It may take a short term loan, dipping into savings, help from family and friends, but if you do manage to purchase a foreclosure, you may be happily surprised. Do your research, find the right agent, and then have fun looking. You just may find your dream home at a perfectly discounted price.
where can is a good place to get a FHA loan to buy a foreclosures home, and which is the best kind of loan?
It is true that Las Vegas Nevada was one of the hardest hit locations for foreclosures. The median price for new and re-sold homes fell to $130,000.
This is great opportunity for investors and first time home buyers. Investors accounted for 41.2% of homes sold in October and FHA insured loans account for about 53% of homes sold.
Because home prices are affordable and rates are low, it makes sense for both these types of buyers to come on strong.
The banks are no longer flooding the market with foreclosures for sale. This will help to stabilize prices.