Century 21 H.T. Brown Real Estate Blog » 2008

Fannie Mae Foreclosure’s

April 30th, 2008

A Fannie Mae foreclosure is a great help to the many people in the USA who cannot afford a house of their own. The cheaper price ensures that there will also be a smaller monthly payment, reducing the risk of default and repossession of the home. This is good for the lender and homeowner alike. It also means that a real estate agent can buy a house at bargain prices and sell it for a profit. They can still keep the house below the average price while making money on it.

What is a Fannie Mae foreclosure?

It is a shareholder company that buys up repossessed property. It then turns around and sells these homes at a cheaper price. The aim of the company is to provide cheaper homes to people who might otherwise not be able to afford it. They will also arrange mortgages and negotiate prices for the homes. They provide a good alternative to people who cannot afford a regular priced house.

How can you find Fannie Mae foreclosure property?

You can find this type of property by 2 methods. Firstly you can look on the fanniemae.com website. You will find many options here to choose from. There are listings of many different types of homes. However be very careful of some properties, as they will require some repair. The second method is to go through a real estate agent. They have multiple listings and can find you one of these properties if you request it. They can also help you to spot any repairs that are needed in a home.

How do you buy a Fannie Mae foreclosure property?

You usually go through a real estate agent. They will contact the company and negotiate a reasonable price for you. They will do this by presenting your offer to the company. The company will then either accept or reject your offer. They can also come back with a counter offer. When they do this you and your agent will then negotiate a price that you can afford for the home of your choice. Once the price is settled you sign the sales agreement to show your good faith in buying the home. Once this is done you will go through the mortgage process.

Qualifying for a Fannie Mae foreclosure property:

Sometimes it is hard to know if you can really afford a new home. The company website can help you with this. They have a special page on their website that will help you assess your income. You can also see if you pre qualify for a mortgage here. Just fill in the financial information that is required and you will be able to get results within minutes. This will save you a lot of time and disappointment. Once you know what you can afford you can then narrow down your search to the properties within your price range.

So do not despair when you look at all those high priced houses. You can still get the house of your dreams by going through Fannie Mae foreclosures.

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Facts About Rent To Own Home Options

April 29th, 2008

The process of rent to own homes is very similar to the rent to own car strategies, where the potential customers of the car rent the vehicle for a stipulated period of time and within this period if they like the car then they go ahead with the decision of buying the car.

Before giving a full commitment on buying house real estate investors can check out the complete condition of the house by actually living in it as renters. The overall advantage of the rent to own homes make them a good way to make a real estate investment.

The idea of rent to own home is fast growing and the business in this sector is brisk as the future home owners can get comprehensive information regarding the neighborhood before buying the home. For he first time investors rent to own has become a good strategy. Most of the times the first time home owners find to their dismay that the down payments required while purchasing a home is huge but when it comes to rent to own homes the down payment is very low.

The rent to own home deals are structured in a way so that both the involved parties benefit from the deal. Here are a few facts regarding the rent to own home plan:

Sale price and the rent of the home are determined by the current market, but bargaining is always welcome. Since the sellers know more about the market than the buyers do , so it is always better to do your homework before gong on with a deal.

The option period is a very important factor; buyers usually prefer a longer option period whereas the sellers prefer a shorter one. In either of the cases the strategies can backfire on both he buyer and sellers, so a concise knowledge of the market is necessary. A longer option period helps the buyer repair credit and builds up equity on the other hand a shorter option period as that might lead to the house being sold early.

When a rent to own home contract is being made, the buyer should look into the matter so that the provision for keeping the price of the house intact during the option period is mentioned in the deal. There have been cases where the seller had evicted the buyer for another hopeful buyer paying a better price.

Most of the times the sellers want to make cash sale but the rent to own home option are far more profitable, as in this case the seller can make a substantial amount of money from the home before actually selling it.

The seller enjoys significant benefits from such a deal, but in case the deal does not work out, he can easily pocket the option fee and the rent premium. The seller usually enjoys tax deduction on his mortgage interest when the option period is going on.

So we see that the rent to own home concept is reasonable way to make a real estate investment that is beneficial to both the buyers and the sellers.

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Creative Owner Financing

April 28th, 2008

If you ask a seller to give you owner financing to buy a home it can be awkward. The seller gives owner financing when the seller carries a portion or the entire purchase price less the buyer’s down payment. The method of owner financing is a time-tested one and it works in different types of markets. Owner financing is a time tested and good approach that works well in different types of markets. There are many who want to sell their property and at higher rates than the market value. There are many who want to be ahead in the competition with other house on the block. There are many who want to get a constant cash flow from their property after they have sold their property.

There are many benefits of owner financing. It enables the customer to sell property in good and bad markets. There is an edge in the competition inn the markets regardless of the new home construction and increased foreclosures. These cannot lead to an influence on the customer .Owner financing attracts moiré buyers. Creative owner financing can lead to less of price negotiations. The customer can have a constant flow of money after the property is sold. This is one of the prime advantages of creative owner financing. The person makes a transition form owner to the investor when he uses owner financing in buying real estate. Owner financing provides a competitive advantage. The other major benefit is that it provides constant flow of cash after the transaction. The strategy is time tested and it allows you to get money from the property you sold and then continue to gain from the transaction even after the property is sold.

In owner financing the customer can settle his or her own terms. These terms can include interest rates and terms of payment. Creative owner financing leads to benefits for all the different parties involved in the transaction. The buyer and the seller involved in the transaction get cash flow continuously. In real estate owner financing the buyer of the property pays the owner directly instead of through the bank. You can get high interest on the monthly payment in creative owner financing. The seller of the property can get a very high price for the property in creative owner financing. The strategy of owner financing helps ion these ways. The methods used in creative owner financing are ideal for many customers.

One of the disadvantages of creative owner financing is the buyer does not pay the taxes, the water bill or other such payments. If this is the case, the government can seize the property. The buyer will have to pay the overdue bills. The buyer may get the property back but the bills will have to be paid by him. These are only some of the features of creative owner financing. There are other various features but they are immaterial if these are looked into. The advantages and disadvantages have been mentioned. Creative owner financing is an old method to look at modern problems. This makes it unique.

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Buying Foreclosure Homes

April 27th, 2008

In current day the Real Estate market has taken a turn for the worse. The market is poor and rates are at an all time high making it very difficult to buy or invest comfortably into a home. Buying a foreclosure home may be the right route for you.

Buying foreclosure homes have many benefits including buying foreclosure homes that are twenty, thirty, or maybe forty percent below market value. Saving thousands of dollars is a benefit that is highly appreciated by both home buyers and investors. Though buying foreclosure homes can be a worthy investment, it may not be for everyone. A Buyer or Investor of foreclosure homes should be educated about the market or ready to conduct the research necessary. To aid in your success there are a few known steps to consider:

The first step to buying foreclosure homes is to learn the foreclosure process for your state and become educated on the different types of foreclosure. There are a few different types of foreclosure utilized within the United States. The two that are most commonly used are referred to as: foreclosure by judicial sale and foreclosure by power of sale. Foreclosure by judicial sale is the preferred and most important method of foreclosure. Foreclosure by judicial sale is used in every state and required in most.

Second, is being prepared to make the purchase. As a home buyer or investor your financing options should be clear. Before discussing purchasing options with the home owner or bank it is important to already be pre qualified for a loan or have profits to purchase the home.

The third step to buying foreclosure homes is knowing your comfort level with speaking with representatives and agent, also knowing your negotiating skills. If you are a first time home buyer or investor it may be wise to hire an agent as your representative. Most home owners use agents to sell their home. If you are not comfortable with the idea of speaking with agents and other representatives it may be easier and most adequate to hire an agent to represent you.

Fourth, is research and doing your homework on any home you are considering. Buying foreclosure homes carry a higher risk than a traditional home for sale. Investigate each home you are considering. By carefully examining each home you can reduce your risk significantly.

The fifth step is realizing that buying foreclosure homes is not a get rich quick scam. Do not believe the hype and think that you are going to buy a foreclosure home for sixty percent below market value. Though you may be able to find some homes extremely below market value, this is not true for all homes. In most cases, home buyers and investors save 20-30% off home market value. With that said be prepared to make realistic offers on pre foreclosed homes and descent biddings on foreclosed homes. Research each home’s market value and review your financial ability.

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Buying Real Estate Properties Owned By Banks

April 26th, 2008

Today, foreclosure is a big issue in regards the real estate market. So, what exactly does foreclosure mean? Suppose, you have taken a loan from your bank, and you secured it against your home. You have been making regular repayments but fail to make a particular repayment on time and this arrear keeps recurring over a period. In such a situation, the bank or some other financial institution, from whom you have taken the loan, may forfeit your home legally. Now, they sale your home to make up for their loss and, eventually pays off your other debts, if any. This legal procedure of selling a fixed property is known as foreclosure.

This legal procedure takes place when any proprietor fails to repay their loans and the loan provider issues a non-payment notice. When the bank or your mortgage company needs to recover the debt, they opt for the foreclosure method. There are two kinds of foreclosure – Strict Foreclosure and Foreclosure by Sale. Through the strict foreclosure method, the bank or the loan provider can directly absorb the defaulter’s property as an alternative for the loan taken by you. Later, in the presence of the responsible government officer, the property becomes eligible for auction. At the time of auction, the bank puts forward their offer in front of the potential buyers.

Foreclosure auctions are generally advertised in newspapers or are by some notice. People dealing with real estates also get the list of foreclosed properties, and they can bid their amounts for the property. Usually, the foreclosed property is offered to the buyers at an amount equal to what the erstwhile owner had borrowed from the loan provider. The bidding amount comes lower than the exact value of that property. The realtors then resale the same property at a higher price. When the auction is over, the property goes to that person who offers the highest amount, and he/she becomes the owner of that property.

It does not matter whether the original owner is present or not – rather, the owner has no real claims over the property anymore. Usually, companies dealing with mortgage loans are much more interested in getting their credit back instead of foreclosing a property. The second kind of foreclosure, that is, foreclosure by sale, means getting a property at a lesser value than the actual market value. The homeowner here grants your proposal to buy the property at a cheaper price for two concrete reasons. Doing so helps them pay the due payments, and there is a chance of getting some cash. Through this process, the original owner finds a way out of bankruptcy and loan compulsion, and manages to get back some element from his equity. The person who buys the property also makes profit from this because s/he is getting the property at a price much lower than the market value.

Foreclosure by sale helps you get rid off your financial problems, whereby you are handing over the property to the investor through a contract. In fact, you, as a real estate investor, can make most out of your investments by directing your finances towards buying pre-foreclosure properties.

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Benefits of Rent To Own

April 25th, 2008

Are you someone who wants to own a home someday? Who does not? But what is holding you back for most of us the answer is finance. Just in case you have a bad credit record, it is unlikely that you will get a house loan to buy your dream house.

For most of us the only way to start living in our dream house depends on the factors like, having good credit, making a huge down payment, and going through a landlord, but all that is history now with the introductions of the rent to own home facility. Now as a buyer you can lease the home of your choice for a few years before taking the big leap and finally buying the piece of real estate.

While buying a rent to own home buyers and sellers both can benefit from the transaction. Nowadays it is really hard to find a buyer who has all the factors running in his favor like a good credit, ability to make a large down payment, but the rent to own home makes it easier for people with lesser amount of resources to get a chance to buy their dream homes.

Advantage of the buyers: the buyers nowadays prefer to go for the rent to own homes because of certain added advantages provided by this kind of a transaction. Firstly, this type of a transaction helps the buyer get a good first hand experience regarding the house, because you know the price of the house only when you start living in it. Minor problems that are not visible from the outside, become more imminent when it prospective buyers start living n the house, the problems might include leaking pipelines, paint falling off etc.

Secondly, for the first time real estate investor it is always a god idea not to buy a property with cash through an outright sale, rather it will be a good Idea to lease it first and then buy it.

Thirdly, people who have bad credit can buy their dream homes by this process as they can repair their credits during the lease period and build up equity. Besides getting a rent to own home is almost the same as leasing to own a car where the buyer leases the car to find out more about the car and whether it meets his requirements or not, and finally he buys the car if it meets the standards.

Benefits of the sellers: For the sellers the rent to own home facility brings in more customers than the outright sales. There are lots of homeowners who have listed their properties but there is a significant lack of prospective buyers in the cash buying market, most of the investors nowadays prefer to buy houses through there rent to own homes.

Most of the sellers can benefit from the fact that most of the times the deal does not go through and they might end up with the entire rent amount to their discretion as the rent credit is considered non refundable. Besides this lease to own home feature allows the sellers to derive the benefits of the houses a bit more before actually selling it off to someone else.

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REO’s “Real Estate Owned”

April 24th, 2008

Bank foreclosure real estate also referred to as REOs (Real Estate Owned) is foreclosed real estate that is owned by the bank due to an unsuccessful foreclosure auction. There are several reasons the home may have not sold at the auction. The most common reason is negative equity- the bank foreclosure real estate is worth less than the amount owed to the bank. Of course, the bank seeks to receive the outstanding balance of the original loan; therefore, the minimum bid for the bank foreclosure real estate is usually the amount of the outstanding balance of the original loan, plus interest and any additional fees. No smart investor or buyer will consider bidding on such a property.

Nevertheless, an unsuccessful sale will not stop the bank from trying to make an attempt to get the bank foreclosure real estate sold. The bank will consider removing some or all liens and fees on the bank foreclosure real estate in order to get it on the real estate market and resell it to the public. The resell process may be retrying an auction or working through a Realtor.

This is a hot market for real estate investors. Real Estate investors take a keen interest in bank foreclosure real estate property. The market of foreclosed homes may be large; but, not always suitable for some investors. The foreclosed property may not meet some important needs. Now day home buyers and investors alike are scrambling through the market of bank foreclosure real estate looking for better deals. Though, most bank foreclosure real estate property are in poor condition, the low sale price of the home highly compensates for the property poor condition.

Investing in bank foreclosure real estate property offers a great return for investors. Bank foreclosure real estate by far offers greater deals than typical foreclosed homes. As an investor you must consider all your option. Make sure you get the bank foreclosure real estate property at the best price. Hopefully, the bank foreclosure real estate that an investor chooses to invest in will shower the investor with rewards; such as a larger return in profit, either through renting the home out or through selling the home.

There are several ways to search for bank foreclosure real estate property; such as, the Internet, magazines and news paper listing. The Internet can lead you to thousands maybe millions of connections. Here you can view listing by state, banks, county, and much more.

You should also invest time in finding a good real estate agent. If they know what you are looking for, they can save you a lot of time and leg work. They can also help you determine the true market value of the home you are considering investing in.

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Bank Foreclosure

April 23rd, 2008

Bank foreclosure is a devastating thing. You will not only lose your home but a lot more. Your credit record will be destroyed and you will find it very difficult to borrow any loans to help you out in the future. However sometimes this is your only alternative. When you receive the letter of repossession you will need to act fast and make a decision. Firstly remember that you do have some options but these will depend on your financial situation. If your problems are only temporary then do consider these options before having to face repossession and all that comes with it. However if you see no improvements in your financial situation then repossession may be your only alternative.

Bank foreclosure means that you have defaulted in your monthly payments and the bank has given you a notice that unless you can come up with the money owed they will repossess your home. This is quite a shocking thing to have to face. However do not panic but understand what your options are. As soon as possible go and talk to your lender and be honest and up front about your financial position. They will be happy to work with you, as they do not want to be stuck with a repossessed house.

What are your options, when faced with bank repossession of your home? Surprisingly there are quite a few. Firstly you can do what is termed as a pre foreclosure loan. This is when you find an investor to pay off your present loan and take over the title of your home. This can be a family member or an agent interested in selling your home for monetary gain. If it is an agent they will sometimes pay you a little more and you will make a marginal profit. In this way you will both win. You will save your home from being repossessed and the agent has made a nice profit. Of course the agent will come out better monetary wise. The lender is happy because he got back his money and will not be stuck with a repossessed house to auction.

Another alternative to bank repossession is a stop foreclosure loan. This can be done if you are not in a very bad financial position, but need a break with your monthly payments. With this loan you will pay off your first loan and start a new one. If you have been paying your house payments for a little while, this could work in your favor. Because the principle will be smaller it will make the monthly payments less. This will certainly ease your financial situation and allow you to get back in control.

Always remember that the bank does not want to foreclose on your property any more than you do. This is because they stand to lose money. When your house goes up for auction, the lender will be lucky if they can get their investment back, as houses go very cheap. Everyone loves a bargain, even if it is at someone else’s expense. Take advantage of this situation and after you miss a couple of payments talk to your lender about lowering the monthly payment. They may very likely work with you so they can protect their investment.

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All you need to know about real estate foreclosure

April 22nd, 2008

If you want to invest in the foreclosure market then it is the right time to do so, the number of foreclosures has increased to great degree in the last year. So in case you want to start a foreclosure investing business, all you have to do is just jump into the wagon. Here is what you can do to beat competition and emerge victorious at the foreclosure market.

The entire foreclosure market depends entirely upon the rate at which you bu the houses, unless the rates are very low you cannot make a substantial amount of profit from this business.

Usually most of the home owners who have mortgage loans for their houses and are defaulters for the payment of the principal and the interest for more than 120 days are legally foreclosed.

Here are some tips that will help you make better deals in the foreclosure market.

Ø Ruthlessness: generally home owners whose houses are going to be foreclosed most often are going through financial crisis so it is better to give them the hops of obtaining money the fast way. One way will be to run advertisements like “houses bought for cash” etc.

Ø Considering the requirements of the homeowners: in case you chance upon a homeowner whose foreclosing date is drawing near, and they have not been able to maintain the house to normal standards. Then a good deal will be to offer the homeowner with fifty percent or less than that out of the total equity of the house.

Ø Get a pre approval: in case of properties where you are not provided with the pre existing finances then the best possible thing to do will be to get a pre approval. This will hasten the process of acquisition of the property.

Ø Do your homework: before you go about making offers to the homeowners, make sure that you have done your homework well enough. Always make sure that the buy will be a good one and you will be able to sell it off at a larger price. One way to determine the equity of the property will be to determine the market value of comparable properties in the area. Another important factor to consider is whether the market is inclined towards the buyer, the seller or even for both of them; this will largely determine the nature of your dealings.

You can also add up the debt and the expenses of the repair and other expense that may accompany the equity. Most of the dealers usually make the mistake of over bidding on a certain property tat will surely lead to losses in the later stages.

The foreclosure bandwagon is getting filled up as time progresses but the fact remains that even though there are many competitors out there, but profit making is purely determined by the dexterity of the investor.

Always remember that if you are well researched and well educated in this field then you will surely succeed and try to keep a watchful eye on the foreclosure listings on the Internet at all times. The Internet is a very useful resource and careful use of it will provide you with numerous houses that are to be foreclosed.

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All You Need To Know About Real Estate Foreclosure

April 21st, 2008