There are two apparently attractive options for buyers scoping out a deal. One type is the "short sale," where sellers have made an agreement with their lender to sell the home for less than they still owe on the mortgage. The second type is the REO (bank-owned) home, which has fallen back into the hands of the lender after the sellers defaulted.
While these properties may be appealingly priced, buyers need stomach and smarts to take proper advantage. If you're considering a short sale purchase, focus only on those with a price pre-approved by the lender. Otherwise, you may be wasting precious time in negotiations that may still ultimately fail.
Also seek out foreclosures that are protected by the Cash For Keys program, which offers the current (or former) owners a cash incentive to prevent them from neglecting the property before vacating it. Either way, inspections are crucial, especially if the house has been vacant for some time. Talk to your agent about having the utilities temporarily reconnected for the inspection, so you're sure all is in working order.
And finally, don't focus on the asking price alone. Location in a declining neighborhood or extreme maintenance and repair issues will eclipse any perceived value in a low price. Great homes are out there at bargain prices, but let an agent guide you through potential pitfalls.
Showing posts with label foreclosure. Show all posts
Showing posts with label foreclosure. Show all posts
4/9/10
It All Depends
The signals are out there: home sales are picking up and prices are slowly ascending. However, recovery isn't obvious everywhere yet. Most markets are still seeing the cheapest homes selling fastest, while mid-range homes are taking longer, and upper-end properties are languishing.
Whether buying or selling, your best strategy in this dynamic marketplace depends on which tier your property sits. This column will begin by offering advice for that bottom tier of the most affordable homes. My next column will discuss the mid-range market, and then finally we'll get around to those most expensive properties at the top.
Most of the two million recent foreclosures have made up the bulk of the least expensive homes on the market. Bargain prices and a federal tax credit have lured investors and first-time buyers into the fray, increasing sales of $100-$250K homes by 5% over the last year. Buyers should act quickly and submit their offer with due haste. If your offer isn't accepted, keep checking back, because deals commonly fall through.
While it's hard to compete against foreclosures in the pricing category, they’re often in dire need of repairs. Sellers can increase their odds of success by offering their home in "model condition" at a fair price. Whether you’re a buyer or a seller, watch this space for more advice on making your sale or purchase work.
Whether buying or selling, your best strategy in this dynamic marketplace depends on which tier your property sits. This column will begin by offering advice for that bottom tier of the most affordable homes. My next column will discuss the mid-range market, and then finally we'll get around to those most expensive properties at the top.
Most of the two million recent foreclosures have made up the bulk of the least expensive homes on the market. Bargain prices and a federal tax credit have lured investors and first-time buyers into the fray, increasing sales of $100-$250K homes by 5% over the last year. Buyers should act quickly and submit their offer with due haste. If your offer isn't accepted, keep checking back, because deals commonly fall through.
While it's hard to compete against foreclosures in the pricing category, they’re often in dire need of repairs. Sellers can increase their odds of success by offering their home in "model condition" at a fair price. Whether you’re a buyer or a seller, watch this space for more advice on making your sale or purchase work.
1/11/10
Myth Busting
When a homeowner faces default on their mortgage, there may be two options: foreclosure or short sale. Foreclosure can be devastating, both emotionally and financially. A short sale, or one in which the lender accepts a selling price less than the amount owed, is a better option for both the lender and the homeowner.
Regrettably, nearly seven out of ten homeowners proceed through foreclosure without ever listing their home for sale. This is due largely to perceived myths about the process, and we need to put a few of these misconceptions to rest.
First, homeowners assume the bank would rather foreclose than accept a short sale. Not true - foreclosure is often more costly for the lender, and short sales often sell for more than foreclosed listings. The banks are trying anything possible, within reason, to avoid the foreclosure process.
Next, homeowners believe there is a stigma attached to short sale listings, and that buyers have no interest in such properties. Not true - to the contrary, many smart buyers are specifically seeking out such offerings for the value they present compared to traditional listings.
Finally, homeowners often assume that there's not enough time to close a short sale before foreclosure is final. Not true - foreclosure is a lengthy process and there is time to negotiate a better result, but you need to start today.
Regrettably, nearly seven out of ten homeowners proceed through foreclosure without ever listing their home for sale. This is due largely to perceived myths about the process, and we need to put a few of these misconceptions to rest.
First, homeowners assume the bank would rather foreclose than accept a short sale. Not true - foreclosure is often more costly for the lender, and short sales often sell for more than foreclosed listings. The banks are trying anything possible, within reason, to avoid the foreclosure process.
Next, homeowners believe there is a stigma attached to short sale listings, and that buyers have no interest in such properties. Not true - to the contrary, many smart buyers are specifically seeking out such offerings for the value they present compared to traditional listings.
Finally, homeowners often assume that there's not enough time to close a short sale before foreclosure is final. Not true - foreclosure is a lengthy process and there is time to negotiate a better result, but you need to start today.
10/26/09
Beyond The Lousy Loans
Yes, it's true, many lenders in recent years have written sub-prime mortgages that could only be expected to default. However, foreclosure is nothing new, and there are myriad reasons that a homeowner might be facing dire straits.
Challenges might include economic hardship due to job loss, bad health or divorce, or payments that jumped too high after a rate adjustment, or simply increased cost of living outpacing income.
Whatever the reasons, the best way to avoid foreclosure is to be well educated and prepared before making a home purchase, and anticipating worst-case scenarios before choosing the loan that is right for you.
If default appears inevitable, know that there is help available, with a "short sale" being the last resort for resolution. Such a transaction is called "short," because the home is sold for less than the amount remaining on the mortgage, and the lender willingly accepts some of the loss.
If you're facing foreclosure, contact your lender's loss mitigation department immediately. While you are in the midst of negotiations, keep a log of all phone calls - the date, time, contact person and discussion. Lenders are overwhelmed right now, so be patient and don't expect an immediate answer.
Whether it's a loan adjustment or short sale, there is a solution to the problem. Your lender and your real estate agent are here to help.
Challenges might include economic hardship due to job loss, bad health or divorce, or payments that jumped too high after a rate adjustment, or simply increased cost of living outpacing income.
Whatever the reasons, the best way to avoid foreclosure is to be well educated and prepared before making a home purchase, and anticipating worst-case scenarios before choosing the loan that is right for you.
If default appears inevitable, know that there is help available, with a "short sale" being the last resort for resolution. Such a transaction is called "short," because the home is sold for less than the amount remaining on the mortgage, and the lender willingly accepts some of the loss.
If you're facing foreclosure, contact your lender's loss mitigation department immediately. While you are in the midst of negotiations, keep a log of all phone calls - the date, time, contact person and discussion. Lenders are overwhelmed right now, so be patient and don't expect an immediate answer.
Whether it's a loan adjustment or short sale, there is a solution to the problem. Your lender and your real estate agent are here to help.
6/25/09
An Offer They Can't Refuse
In real estate investment, one person's misfortune is another's opportunity. Indeed, with so many foreclosed properties on the market, buyers are poised to take advantage of a literally once-in-a-lifetime chance at investment or ownership.
Every opportunity presents some challenges, however, and you'll need more than luck to effectively buy a distressed property. These transactions are more complex than traditional sales, and you are strongly advised to seek the advice and representation of a real estate professional well versed in this new marketplace.
While a bank-owned home may look like a great deal, don't assume that any offer will be accepted. Most banks list their foreclosed properties through real estate brokerages, and while they want to sell as quickly as possible, the listing agents have a fiduciary responsibility to get a good price for the owner.
An insultingly low offer can table the transaction permanently, so proceed with common sense and a trusted representative. Keep in mind when negotiating your offer that you should have an additional 10% of the price tag set aside for repairs. A foreclosed property, particularly an older one, will almost certainly require some overhauls.
In addition to your agent, consult with a local real estate attorney who can advise you about current foreclosure laws, which vary significantly from state to state. Know exactly who's at the door when your opportunity knocks!
Every opportunity presents some challenges, however, and you'll need more than luck to effectively buy a distressed property. These transactions are more complex than traditional sales, and you are strongly advised to seek the advice and representation of a real estate professional well versed in this new marketplace.
While a bank-owned home may look like a great deal, don't assume that any offer will be accepted. Most banks list their foreclosed properties through real estate brokerages, and while they want to sell as quickly as possible, the listing agents have a fiduciary responsibility to get a good price for the owner.
An insultingly low offer can table the transaction permanently, so proceed with common sense and a trusted representative. Keep in mind when negotiating your offer that you should have an additional 10% of the price tag set aside for repairs. A foreclosed property, particularly an older one, will almost certainly require some overhauls.
In addition to your agent, consult with a local real estate attorney who can advise you about current foreclosure laws, which vary significantly from state to state. Know exactly who's at the door when your opportunity knocks!
Subscribe to:
Posts (Atom)