Buy a House: Is Now the Time?

November 24, 2009

Before deciding to buy a house it is important to explore all available options. Buying real estate in today’s economy offers buyers multiple opportunities to purchase houses at significantly reduced prices. However, precautions should be taken when considering distressed properties such as foreclosures, bank owned and short sale properties.

Most buyers hire a realtor to help them buy a house. Realtors can help buyers narrow down their search by compiling a list of features, location and price range. Realtors can assist buyers with price negotiations, submit offers and counter-offers, and prepare documents for transfer of real estate.

Although realtors can be instrumental in locating the perfect house, there are other options available for buying a home. Today, many sellers are engaging in lease-to-own options which allow buyers to lease the home while contributing a portion of rent monies toward the purchase. This type of real estate transaction is perfect for borrowers who have poor credit or unable to provide a sufficient down payment to obtain a mortgage loan.

Lease-to-own contracts generally last between two and five years. The contract outlines the terms of the sale and includes a predetermined purchase price. Most sellers require buyers to provide a down payment of 3- to 10-percent. Once the contract expires, buyers must obtain a mortgage loan for the remaining balance.

When entering into rent-to-own contracts, buyers should enlist the help of a real estate attorney to ensure documents are legally-binding and protect both parties in the event of default. Buyers should strive to remove negative marks from their credit and pay rent monies on time and in full each month. Doing so establishes a positive record of payment which can assist the buyer when the time arrives to obtain a mortgage loan.

Another option to buy a house is through the use of seller carry back mortgages. Using this type of financing, the seller acts as the mortgage lender. The majority of sellers who engage in seller carry back financing generally finance only a portion of the purchase price. However, some sellers will carry the full amount for a specified period of time.

Seller carry back contracts generally last between three and five years. Sellers typically require a down payment of 5- to 10-percent of the purchase price. If the seller carries back a portion of the sale price, the buyer must obtain traditional financing for the balance. In essence, the buyer has a first and second mortgage.

Seller carry back financing is a good choice for buyers who do not possess sufficient credit rating to obtain funding for the entire purchase price. During the contract period, buyers are given time to establish credit or remove negative marks which could prevent them from obtaining a mortgage loan or refinancing the note once the seller carry back contract expires.

Probate real estate can be an excellent option for first-time home buyers, individuals who want a second home, or real estate investors. Probate real estate refers to property bequeathed to heirs through a decedent’s Last Will and Testament.

The probate process can last for months or even years. During probate the estate is responsible for maintaining the house. If the decedent held a mortgage on the property, the estate must continue making payments and remain current on homeowners’ insurance and property taxes. If the estate does not have sufficient funds, the estate administrator can sell the house to repay the loan or eliminate associated expenses.

Distressed real estate is becoming a popular choice for people who want to buy a house. Distressed properties include foreclosure and bank owned homes, as well as short sale real estate. Bank owned properties are foreclosure houses that did not sell through public auction. These properties can generally be purchased for 10- to 30-percent below market value.

These are a few options to buy a house at reduced prices. Take time to become educated about the various real estate and financing options. Doing so could potentially save you thousands of dollars and provide instant equity in your new home.

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Using Foreclosure Auctions to Buy a House at Below Market Value

November 17, 2009

Buying a house below market value is a good way to get more profits as a real estate investor. One way you can find property at below market value is a foreclosure auction. Real estate goes into foreclosure when an owner of that real estate does not pay their mortgage on time. When real estate payments are not up to date it is a distress property. Nothing physically can be wrong with the house and it can be classified as a distress property. If the payments are not up to date that is enough to make a house a distress property. When a house is in distress status the owner is given a certain amount of time to bring the payments up to date. If the property owner does not bring the house up to date the bank that holds the mortgage can foreclose on the property.

When the bank takes control of a house that is when a distress property is classified as a foreclosed property. When the bank forecloses on a house, the bank will try to sell the house in a foreclosure auction. In a foreclosure auction the person with the highest bid will take control of the house from the bank. If the price is too low the bank will not sell the house. Some foreclosure auctions start at the price the bank is willing to sell the house for. Finding these auctions can take some work. Some places you can find foreclosure auctions are the newspaper and online. One other thing you can do is buy foreclose property lists for your area online. It is important to do research on the properties to see witch ones you will be interested in. It is important to research the property so you won’t over bid. One way of doing this is going and physically taking a look at the properties you think you will be interested in and do an assessment of there value.

Most likely you will not get to see the inside of the house, but you can make an assessment of the house from the outside. You should stay off the physical property if you can. You will not want to get charge for trespassing. It is recommended that you take pictures and write notes about the property; this is a good way to help you to make the decision of what properties you will want. It can also help you to make an assessment on the highest you will pay. When it is time for the foreclosure auction stick to your assessments and do not over bid. You may not get your first choice but it is better to get your second or last choice at below market value than to over pay for your first choice. Buying foreclosure properties does take some work, but the money you will save is worth it.

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Waiting to Buy a House?

November 16, 2009

Property prices fell by just 0.4% in November 2008 compared to 1.3% in October which makes an annual fall of 13.9%.  Having waited for one year you have saved thousands of pounds.  If you wait you could save yourself thousands more, possibly…or could you then miss out?  Is the small fall a sign that the property market is beginning to bottom out?

The factors for a property price are simple: Supply +  Demand + Mortgage

So let’s look at all of them in turn:

Supply: At the moment, there is plenty of supply.  Houses are staying on the market for months. New developments are particularly in supply as possible new sellers are staying out of the market where possible.

Demand: There is not much demand because property prices are falling.  A recession is almost here and unemployment is going to rise.  Moving and buying property is expensive.

Mortgage:  This is the giant and the reason why property prices have risen so much in recent years and subsequently fallen.  To secure a mortgage banks need to lend to each other.  As banks have massively shrunk their lending, mortgages are now much harder to secure – mortgages are being approved at less that half of last year’s level.  Without a mortgage most people can’t buy a house.  Until this changes the lack of mortgages available and being approved will continue to feed the low demand which will keep property prices down, and with a recession, higher unemployment and more repossessions, prices are likely to keep falling. 

Affordability has of course improved which will encourage some new buyers to look at the market.  Many are still waiting to see how much further prices will fall.

However, it is worth looking at property and making preparations.  You need to be ready.  As soon as banks do start lending (and this may be forced on them by the government), prices will level for a while and then gradually start to climb.  Looking at property also helps you to decide exactly what you want.  And if you find your perfect home you may want to buy now rather than risk losing it.  Remember if you want to buy now or buy soon, make a low offer.

If you are thinking of buying property you need to prepare:

Your finances need to be in order.  What deposit do you expect to have?

How much do you want to spend on a mortgage?  What mortgage can you get? Speak to a mortgage adviser or look online.  How much do you want to spend on making your house your home?  Be realistic – moving house and owning a home can be expensive.

Your employment needs to be secure.  The economy is shrinking, and huge companies are failing.  How safe is your job?  What would you do if you lost your job?  Do you have savings to fall back on?  If not, you may want to consider keeping some of your deposit as an emergency fund.

Finally, look at property, revisit your figures and wish list and revise all preparations.  You may only buy in a year’s time but you may buy in 3 months time.  The key is to keep researching and be prepared for your perfect – and well-priced – property.

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Buying Your House Based on Your Lifestyle

November 13, 2009

Are you looking for the perfect type of home to buy? Consider also its location and proximity to your favorite activities.
There are obviously many reasons when it comes to picking a neighborhood, some helpful and some not so helpful. The default reason that is most often cited is familiarity, which is important but there are other reasons to consider also. Let’s discover what they are.
A case in point, most likely you will be living in your new home for a number of years. The average person lives in their home five to seven years before moving. In today’s economic setting that may rise. So thinking long term is important when deciding where you are going to buy a house.
Along the same line, look for communities and neighborhoods that fit your daily life. For most people distance from work is an important consideration. With the abundance of technology, the ability to work at a home office has evolved. So for all the non-commuter who are not worrying about the price of gasoline, the number of miles to your job’s headquarters is not as crucial. But for those who work outside a home office, cities spreading over many miles can cause timely commutes for workers.
In cities that offer convenient transportation systems such as bus, train and subway systems it may be more important to find a home that is close to these services. To be close to the physical location of your work or office may not be as important.
If someone with children is buying a house, it is important to consider school systems. When you have small children you may have the added need of preschool childcare. Owning a home convenient to your childcare services and schools can add or decrease hours at the end and beginning of your day when you feel most rushed. Of course not all childcare services are created equal so it is important to adequately research available sources.
Accordingly, if you have school age kids then proximity to school and after school care programs is necessary. Of course quality of education is important to every family. Since you are most likely going to live in this house for at least a few years you want to be sure to research programs that meet your child’s requirements.
Americans love the freedom of choosing different lifestyles. So it is important to examine your preferences when finding a community to call home. Beside issues like work and school, there are other important reasons to decide where you want to live.
Convenience to grocery shopping can mean a lot. Most people frequent the grocery store at least once a week and if you are like most folks, you use several stores to buy your meat, staples and fresh fruit and vegetables.
By the same token, for many Americans, casual shopping is the national past time. If this describes you, availability to department stores can be significant. If you love to shop consider finding an area to buy a home that caters to your passions.
Available enrichment within the community is not to be overlooked. Usually we consider number of bedrooms and bathrooms but how about nearby entertainment. You may enjoy frequenting cultural locations. Do you like city parks, community theater and libraries? You may love being close to the ocean, mountains or other recreational places. You might enjoy paths for biking and jogging or simply going to the gym. Once you determine the activities most important to you, you can look for a house that makes doing what you love convenient.
Certainly, the most important issue when it comes to finding a community to call home is comfort. Ask yourself this question before you decide on a location. Do I feel at home here? If you can say the house you have found feels like home sweet home, you may have found the perfect place to call your very own.

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Buying a House – Can Anybody Do it

November 12, 2009

Anybody can buy a house. There are several ways: you may need to fix your credit to get financing, or find a real estate investor to buy a house. The most important question is do you have the necessary income to keep the house once it has been purchased.

Before you buy a house you should determine if you can afford the house. If you go looking at homes and find one you like, then when it comes time to look at your finances, you find that there is no way you can afford it. It could be crushing blow. This could lead to bad feelings when looking for a house next time or could end your house hunting altogether.

One of the first things I always suggest is doing a budget. Now, nobody likes to do a budget, but you really should. This will determine the money you have coming in and what you are paying out for your daily living expenses and bills. You need to know the amount of money you have to make payments on a home. Remember that this number may include what you already pay in rent. This will determine what you can afford when you buy a house.

The easy part of assessing your budget is to track your monthly bills and income. Generally, these are similar each month. The hard part of the budget is tracking what you spend at retail stores and online. If you use software to track you debit card transactions, this makes it easier to find out where you are spending your money. If you use credit cards to make purchases, you will have to track how much you are spending each month. Is it more or less than your payment? The hardest part of your budget to assess is cash transactions. Unless, you keep all your receipts, you won’t know where it goes. For one month save all your cash and sales receipts for an enlightening experience. Decide what can be eliminated or reduced to allow for savings.

The budget is a valuable tool that nobody else will help you to do. They may mention it but not give enough information to help you work one out. They just want to know if you have enough for a down payment and can afford the first 2 or 3 payments. After that you are on your own.

Copyright 2009 Jody CastroLearn more about how to Buy A House from Cash-4-Home.com

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Buy a House – 5 Steps to Get You Started

November 11, 2009

Are you ready to buy a house? This article focuses on prioritizing your housing needs before you begin shopping for a home.
There are a lot of reasons to buy a home. A home is an asset that over time increases in value. There are always periods when home values diminish but over the long term, there is no single better investment.
A home is also a place to raise your family and adds stability because it encourages families to plan for the future.
Owning a home is a way of investing in your community. It helps improve neighborhoods and provides local economic strength.
Because homeownership is such a positive influence on families and communities, the federal government is active in creating programs through FHA and using tax incentives to encourage buying a home.
Often the most difficult part of buying a home is knowing where to begin, especially for first time home buyers.
Now it is time to focus on deciding your housing needs before you begin your search.
It is far more efficient to determine your personal requirements before you begin your search for a home. Start by thinking about the way you live. Are you a single person? Are you married? Do you have children? Perhaps you have a parent or grandparent living with you. For those whose commute never leaves the front door, a home office is not a luxury. Pet owners have additional considerations such as feeding and bedding areas. Sit down and write out what you think you need regarding space in a home.
Now comes the fun part, listing options. Relax and imagine what you truly want. Jot down whatever comes to mind first, such as a gourmet kitchen, hardwood flooring or a large foyer.
After listing what you need and adding additional features that you would like but are not essential, start to consider your priorities.
Priorities may include lot size and location. Do you want a big yard that may require more upkeep or a smaller yard with less maintenance? Do you like corner lots in a neighborhood or would you prefer to be located in the middle of the block or end of a cul-de-sac? Keep track of ideas regarding lot dimensions and location.
Square footage is a giant consideration. How many bedrooms are important? Is a laundry room better than placing your washer and dryer in the garage? More than one bathroom is convenient? What do you want in a kitchen? Contemplate the number of rooms, the square footage and optional features. Write them down.
Other priorities will include the building style. It is a good feeling to enjoy coming home to a house that is pleasing. You will be drawn to one or two types of homes. Remember to bring along your camera for houses that catch your eye.
Since a neighborhood becomes your local community, pay attention to the surroundings. For households with school age dependents, proximity to schools should be considered. Will your kids be able to walk to school or are they located too far away?
You may also want to think about where you want your home to be in proximity to your job and public transportation. Do you need to be close to the subway or train station? Is the bus how you get to work? Will the location of a certain house increase your commute?
Regarding all these items, establish your minimum requirements. Then build a wish list too. Both checklists are important.
And remember what I say. It is your house and your mortgage. No one is going to care about it more than you.
Above all, decide you are going to have fun while buying a home.

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A Good Time to Buy a House?

November 10, 2009

Not only could this be a good time to by a house, but it may be the best time in years. For some reason, home buyers seem most interested when prices are high. But just as we all like to see a “20% off” sale on our favorite consumer items or groceries, we should be more interested in buying a house when they are selling cheap. That’s right now.

Of course, if you already have a home you might hesitate to move up to a larger one now. Given the number of people in over their heads on their mortgages, it makes sense to be cautious. But if you are hesitating because you don’t want to sell your current home at these lower prices, think again.

Let’s suppose you have a home that you owe $90,000 on, which was worth $180,000 just two years ago. Maybe values have dropped by 20% in your area of the country since then, so it’s now worth $144,000. It might seem that this is a terrible time to sell. On the other hand, if you had plans to move into a larger home at some point, this may be the best time.

For example, suppose a home you’re looking at is selling for $200,000. It would have likely cost you $250,000 just two years ago. That’s also what it will likely cost if you wait until your own house is back to a value of $180,000. Does it really make sense to wait to get $36,000 more for your home if it means paying $50,000 more for the next one? Not at all.

Now, if you have the financial means, you might want to buy the new home now without selling your existing house. You can rent out your current house and wait for better times when you might get more for it. But if you need to sell to buy, now is the time.

Not since the Great Depression has there been such a steep decline in the prices of homes. You can call it a crisis, or as the federal regulators say, a “correction,” but it just as meaningful to call it a “sale,” so yes, it’s probably a good time to buy a house. Of course there is no guarantee that we have reached the bottom on prices, but at the very least you know you are paying substantially less than you would have a couple years ago.

What if you’re a first time home buyer? Well, as pointed out above, it makes sense to buy something when it’s on sale – including a house. In addition, interest rates are still low (as of late 2008) . And although it’s tougher to get financing now, this isn’t all bad. You can feel safer knowing that banks and other lenders are no longer allowing borrowers to get mortgages they can’t afford.

Houses on sale, interest rates still near all-time lows, and lenders no longer pushing mortgages that get you into trouble – this may be the best time to buy a house.

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Gilbert Homes For Sale – Five Helpful Tips Before Buying a House

November 8, 2009

For most, buying a house is a dream come true. Finally, they get the chance to have their very own place.
However, buying a house is unlike buying any commodity in the store. It does not only involve picking a brand, paying for it and taking it with you. Although the concept is the same, purchasing a house can be very difficult. You have to pay attention to details and make your research about the house.
To help you acquire one of those Gilbert Homes for sale with ease check out these tips:
1. It is important that you determine your budget first. How much are you going to pay for the house? How much mortgage are you going to get? Determining your financial capacity will prevent you from checking houses you cannot afford. You can rest assured that the houses you will see are within the price range suitable for the kind of income you are generating. This will also allow you to manage the expenses better to avoid foreclosure in the future.
2. Once you have your price range, you can consult a sales agent. Having a sales agent to assist you will make your search for a house easier. They are aware of various houses on sale and they can present you with the properties that are within your budget. If you are unsure with the first house, they can immediately present a new option for you.
3. When you finally see a house that you like and within your budget, do not get too excited and close the deal. Make sure that you check the neighborhood first. Will the neighborhood provide security? How long will it take you to reach your office? How far is it from the kids’ school? Is water a problem, how about power? It is important that you know these things because these factors will help you have a more comfortable life.
4. If the location appeals to you, ask a professional to inspect the house. Many skip home inspection because they say that it is just an added expense. However, inspecting the house can save you from a lot of trouble. The inspector will check all areas of the house. He will be able to uncover any problems. You can settle this with the seller by either adjusting the price or asking him to repair it. Home inspection is applicable even to new houses. Therefore, even if it were from Gilbert Homes for sale, it would be better to have a home inspector check it.
5. Finally, finish all the paper works needed for the transfer of ownership. You do not want to have problems concerning these documents in the future.
In order to avoid having problems when you purchase a house, make sure that you know what you are buying. Check the house that you can afford. You can ask a sales agent to help you find the right house however, do not forget to check its environment and the house itself before you close the deal.

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Is it a Good Time to Buy a House?

November 6, 2009

It’s a constant question now in the real estate market: Is it a good time to buy a house? Of course it is difficult to answer in an article since you may be reading this years after it is written, when conditions have changed. But whenever you find this article, the following three crucial factors are what you’ll want to look at to answer the question for yourself.

Home Values

At the moment, the first thing most people are wondering when they ask if it’s a good time to buy a house, is whether prices have finally stopped falling. Since a home is seen as an investment of sorts, we all like the idea of buying when values are rising. I am writing this in early 2009, and no, home values not only are not rising in most areas, but they don’t seem to have stopped falling.

We just bought a home anyhow, and there are several reasons why we felt comfortable doing so. The first is that prices don’t seem to be falling much in our area (Canon City, Colorado). Apart from the various foreclosures that are dragging prices down a bit, the market here is much more stable than in other parts of the country. A stable job base and the fact that prices never rose too far too fast during the “boom times” helps.

The real estate market does not act the same everywhere in the country. So to see if a bottom is near or if prices are rising, pay close attention to what is happening where you are. On the other hand, we did not buy counting on rising prices, because that is not the only determining factor. In fact, it is possible that the problems in the country will get worse and drive prices down 10% or 15% even here. So what else made us decide that for us it was a good time to buy a house?

Interest Rates

At the moment you can get fixed rate 30-year mortgage loans at about the lowest interest rate in your lifetime (no matter how old you are). Our own rate is 4.5%. That’s not a variable or “teaser rate.” It is fixed for the thirty years of the loan.

Let’s look at why this matters so much – as long as you plan to stay in the house for a while, as we do. Suppose you pass on a house that is selling for $200,000 and waited a couple years while prices fall another 10%. But suppose that at that time interest rates were up around 7.5%. You buy the house for $180,000. The payment (assuming you have a 10% down payment and borrow $162,000) is $1,132 each month for principal and interest.

But what if you had bought at $200,000 and put 10% down? Then your payment on the $180,000 loan would have been $912. That’s right, you would be paying $220 more each month if you waited and bought at the lower price. That amounts to $77,200 more that you would pay over the thirty years if you stayed in the house that long ($79,200 more in payments, but you saved $2,000 on the down payment). This demonstrates the importance of the interest rate in determining your true cost.

Personal Situation

Is it a good time to buy a house, then? That depends not only on prices and their direction, and not just on interest rates, but on where you are financially. How secure is your income? If you lost your job, could you make the house payments for six months while you looked for another? Can you count on finding another job that will provide enough income to pay for the house? Are you going to be staying in the area long enough to justify buying (renting can often make more sense if you will be moving within a few years)? These are the more difficult questions to answer, but perhaps the most important in determining if it is a good time for YOU to buy a house.

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How to Buy a House – Use This System to Compare One Home With Another

November 5, 2009

Everyone experiences this common dilemma when buying a house.
We view houses without a system in place to compare one house with another. And it can cost us.
You probably know what follows. You walk through six or seven open houses. You return home to review your notes but suddenly you are confused. You can’t remember which house you liked and which ones you didn’t.
How can you keep track of the homes?
You will find buying a house is all about comparison. Most likely, you will have already narrowed down your search to homes that are similar in price. In fact if you have been preapproved by your mortgage lender, most of the homes you preview will likely fall into a similar price range.
It is becoming clear to you that further evaluation is necessary.
In order to compare homes it is wise to have a system. The Department of Housing and Urban Development, or HUD as it is commonly called, has created its own score card. However before I go any further, I strongly suggest adding a digital camera onto your home shopping procedure.
With this in mind, your real estate agent is going to take you to see several houses based on information you have provided. To remember each house, use a camera to photograph important attributes. This way you can analyze comparable pictures.
First, take a picture of the outside of each house. Then photograph the major rooms such as living room, family room, and kitchen.
Second take photos of the yards and any extra features about each house that you like as well as dislike.
Don’t forget problem spots too.
Keep in mind that if you are systematic in your approach, you will be able to easily compare pictures of the major rooms of each house, the yards, extra features you thought were beneficial, and potential problems.
Now you need the HUD Home Buying Scorecard. Print out the pictures for each house and attach them to your score card.
Have you heard of the HUD Home Buying Scorecard? It is a home buying checklist designed to remind you of important features in each home and to score each feature with a good, average, or poor score.
Before you go on tour with your Realtor, print out or copy several HUD Scorecards so that you have one for each individual house. At the top write the address and list price for each home you are previewing.
Basically the scorecard highlights features from 4 important categories that everyone buying a house needs to consider.
Briefly the first category includes attributes from the home itself such as square feet and number of bedrooms to roof age and condition of gutters and downspouts. Score each one.
The second category compares items related to neighborhoods and includes the appearances of nearby homes and businesses, traffic conditions, pet restrictions, and garbage service.
Perhaps of most importance, local schools comprise the third section reviewing teacher to student ratios, safety standards and test scores.
Lastly, buying a house should take convenience into consideration. Rank features such as parks, shopping malls, places of worship, and hospitals.
Now use this system to analyze. Clip the pictures to corresponding scorecards. Begin evaluating the houses using the photos and scorecard criteria. You will be able to easily analyze and decide which house is best for you.
Who says buying a house has to be confusing? Good luck and happy shopping!
Always consult your real estate professional before taking pictures within a private residence.

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