Tuesday, November 25, 2008

Buying Foreclosures

Buying Foreclosures for Excellent Savings

Most savvy homebuyers know that buying foreclosures can be a great way to purchase a home at just a fraction of its market value. But beware! Those who jump into the foreclosure market without any additional information are liable to learn some very valuable lessons the hard way. Just like anything else in life, buying a foreclosed home has its pros and cons. They present wonderful, profitable investment opportunities, but they can just as easily become money pits if you don't know what you're doing.

Why Buy Foreclosures?

Why would you want to buy a foreclosed home? Here are just a few of the reasons that homeowners and investors are flocking to the foreclosure market.

  • Low prices. Foreclosures sometimes sell for 20 to 50% below their true market values. More modest discounts of 5 to 10% are more common, but foreclosures are almost always priced lower than homes in the traditional real estate market.
  • Great fixer uppers. Many foreclosed homes are 'fixer upper homes' that need repairs, renovation, and tender loving care. By investing a little sweat equity, most homebuyers find that they can make significant profit by reselling the home after some relatively quick and minor repairs.
  • Lower closing costs. The banks and government agencies that sell foreclosed homes are in a hurry, which means that they are often willing to accept lower offers on down payments, financing options, closing costs, and all the other miscellaneous costs associated with buying a home. Many sellers will come right out and offer buyers great deals and contract terms simply to sell the house quickly.
  • No move-in delays. Most foreclosures are vacant, meaning that you can move in almost immediately after purchasing the home, without having to wait for the previous owners to move out.
  • Flexible financing. When banks sell foreclosed properties, they're often willing to offer very flexible financing terms to sweeten the deal and sell the property more quickly.
  • Profitability. Because foreclosures are so inexpensive, they're great options for resale, equity-building, renting, and other investment purposes. You can easily make a tidy profit, and quite possibly make your personal fortune by wisely investing in foreclosed properties.

    The Learning Process: Buying Homes in Foreclosure

    With so many advantages to buying foreclosed homes, why isn't everyone doing it? Because there are some important disadvantages to doing so. The disadvantages are manageable, but only if you're well aware of what you're getting into before making an offer on a foreclosed home.

  • Liens and liabilities. Foreclosed properties may have liens from unpaid taxes or liabilities regarding the property title. These hassles can increase the paperwork burden and make the process of buying foreclosures more expensive. Fortunately, a little preemptive research and help you avoid these time wasters.
  • Former homeowners. Sometimes the former owners of a foreclosed property are in denial and refuse to move out of the home. If you're the unlucky buyer, evicting them will be your responsibility. But again, doing research in advance and working with a professional real estate agent can obviate the situation.
  • Property condition. Many foreclosed properties are in good condition in beautiful neighborhoods, but some are rundown and reflect the financial difficulties that the previous owners were facing. The latter require significant repairs and renovation, which is fine if you want a fixer upper, but it's not something you want to discover after purchase. Be sure to give the home a thorough inspection before buying it, so that you won't be unpleasantly surprised by leaky roofs and septic tanks after purchase.
  • Different buying procedure. When buying a home in the foreclosure market, you'll find that you need to do more research and paperwork and exercise more caution than you would in a traditional real estate market, because foreclosed homes are sold as is, without any guarantees. But given the profit-making potential of these homes, the extra paperwork seems a small price to pay. Published on ForeclosureDeals.com

If you are interested in receiving a notice of default list or foreclosure list for the St. George, Utah area. Email me at prjones@kw.com





Wednesday, November 19, 2008

Home Selling Mistakes

People say the best days to own a boat are the day you buy the boat and the day you sell it. That's not true when it comes to home ownership, unless, maybe, you live on a boat. The best days in home ownership are when you buy a home and all the way through until the day you decide to sell.
Lots of home owners cry when they sell. Before the ink is dry on the listing agreement, eyes often swell with tears, and we're not talking about the listing agent. That's because sellers have developed relationships with their homes. Homes hold treasured memories. It's common for sellers to be very emotional about their home. Some are overcome by sellers remorse. However, some sellers weep for a different reason. They sob because they can't sell their home.
Home is Priced Too High
By far, the worst home selling mistake a seller can make is hanging the wrong price tag on a home. If the home is priced too high, buyers won't look at it. If it's priced too low, sellers worry that they'll give away profits.
Pricing a home to sell is an art. Part of the market value is based on comparable sales, but other factors to consider include market movement, demand, the home's location and its condition.
If the home is overpriced, buyers might submit lowball offers, which tend to result in an immediate offer rejection. These extremely low offers tend to infuriate and insult sellers.
Some agents deliberately overstate the value of a home and push a seller to sign an overpriced listing There are many reasons why agents do this, but the bottom line is sellers lose a competitive edge when later reducing the price. The bottom line is sellers who "test the market" get stung.
The Home is in Bad Condition
Getting your house ready for market goes beyond making the beds and washing dirty dishes. Although I've seen plenty of homes with toys scattered throughout and dishes piled in the sink; buyers can't get out of those homes fast enough. There are at least 10 essential steps to take to preparing the home for sale.
Some homes need updating and quick fixes. Doing repairs before resale can boost chances of quickly selling. If items are broken or buyers see deferred maintenance, they wonder what else is wrong. It's more expensive, actually, not to fix the house.
Dressing your home for showings is called staging a home. Think of the process like arranging flowers in an attractive vase. If you or your agent lack the vision or ability to stage, consider hiring a professional home stager.
Home is Marketed Wrong
Whenever I see a badly shot photograph in MLS and perhaps it's the only photo, I want to shake the agent and scream, "What are you thinking?" But agents and sellers make plenty of marketing mistakes.
The battle cry of frustrated sellers is: "Why isn't my home selling?" These are likely sellers who are not employing marketing strategies designed to expose a home to the largest pool of buyers. Here are 10 good marketing tips that take the guesswork out of selling your home.
Once a buyer has entered a home, the marketing continues. To increase the chances that a buyer will entertain an offer, here are ten showing tips.
Seller Hired an Inexperienced Agent
You can hire a good listing agent or a mediocre agent. They all cost about the same. Here are 10 reasons to hire an agent.
If you want full-service, then hire a full service agent. If you are fairly confident your home will sell without a full-service agent, then talk to a discount broker. Learn the difference between REALTORs® and real estate agents.
Carefully read the listing agreement to make sure the agent who brings a buyer is fairly compensated because one surefire way to make sure an agent won't show your home is to offer a silly commission percentage.
Written by:By Elizabeth Weintraub, About.com

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