When NOT to Buy Real Estate

Most people would probably think a real estate agent writing about NOT buying a house now must mean the agent has either lost his/her mind or is independently wealthy.  But, I believe there are a few times when the decision to buy real estate should be put on hold.  I'd be interested to hear what you think at the end of the article.

If you have recently changed jobs, you may have a hard time getting financing for a new home.  Instead of wasting valuable time looking for a home, a smarter option might be to continue saving for a down payment while maintaining a regular work schedule.  You could also work at improving your credit history by purchasing things on credit and promptly paying them off.  Once your current employment history and monthly income has been consistent for at least a year and you have a healthy down payment saved, then contact us to be shown homes for sale in the area you are wanting to buy in.

If you suspect you might need to change jobs soon it would be wise not to purchase a home.  The process of buying a home is expensive even if you don't consider the actual cost of the home.  Imagine being laid off or transferred shortly after buying a home.  If you're forced to make a quick sale of a home you just bought, chances are you could lose money.  Waiting until there is stability in your life might be the prudent choice.

If you're new to an area, it might be a good idea to explore it a little before jumping into purchasing a home there.  It can take time for the character details of different neighborhoods to reveal themselves, and buying in the "wrong neighborhood" is a decision that could affect you for life.  Renting for at least a few months can seem like a waste of money, but in fact it gives you valuable time to make a wise decision about where you want to live and invest your hard earned money.

There are other circumstances and instances which could make a buying real estate a poor choice at a given time, these are just a few thoughts.  I'd love to hear yours.  Leave your comment by clicking the "Comment" link below.  ALthough you need to supply an email address along with your name to leave a post, don't worry, your email address WILL NOT BE PUBLISHED here for anyone to see or abuse.  We are very strict about that, and hope you will leave us your thoughts on this topic.

Buying Foreclosures: Things You Should Know

If you're considering buying a foreclosed property, there is a lot you should know if you have never done it before.  Yes, there are a lot of great deals in the market these days, but there are different stages of foreclosure and the more you know, the more you can protect yourself.

Pre-foreclosure is when the homeowner still owns the property and knows there is potential for foreclosure. They’re likely not current on their payments and are in danger of destroying their credit and losing any equity they have.

The second option is buying at auction.  Approach this method with caution - there is a lot of risk such as liens on the title and unknown repairs.  Also, cash is typically needed at this stage if you beat the bank's bid and win the auction.

The last option is post-foreclosure.  At this point, the home is known as REO - real estate owned property by a bank or lender.  The bank won at the auction and is now selling the home to recoup as much money as possible - at least what is owed on the property.  The bank will most likely hire a local real estate agent to put it on the market.  The longer the home is on the market, the more willing the bank is to work with you on selling price.  Keep in mind, banks do not want to be in the business of owning real estate – they want to get rid of it as quickly as possible.

Here are a few things to keep in mind when purchasing a foreclosed property:

1. Get a full approval from a mortgage lender who has verified your income and assets. This will give you more negotiating power.
    
2. Pick a zip code you are interested in and do research on what homes are selling for and the recent trends with property values in that area.
    
3. Get an inspection done and make your offer contingent on satisfactory results from the inspection.
    
4. Determine potential repairs and their costs.
    
5. Remember you have the upper hand in negotiations when it comes to the bank paying closing costs and making repairs.

Be cautious and patient in the foreclosure buying process.  If handled properly, you could find a great home in which you may have some instant equity.

Considering a foreclosure?  Have any questions?  Post them here by using the "Comments" link below.