Best Places to Invest in Foreclosed Homes

By: David Fritz

The news often highlights the cities with the most and heaviest discounted foreclosures. But when considering a real estate investment is this really where you want to look? Not according to Forbes magazine. At first glance, cities with the heaviest discounts may seem promising but bargain prices in “flimsy” markets do not make a wise investment. As Forbes says, better to look at cities and towns with strong economies and a relatively stable housing market. Using this yardstick, Raleigh was recently rated #2 in a list of the 10 best places to buy a foreclosure.

Makes sense. An often heard comment from local real estate agents is, “I have clients ready to buy if only they could sell their home in Ohio, New York, etc.” Employment opportunities and quality of life are dominant themes drawing families to the Raleigh area. Wow, it’s a good place to put down roots, maybe that makes it a good place to invest in real estate… BINGO!

Having decided on the area, then it’s down to the basics. Do your homework, check out the neighborhood, schools, shopping, and parks. If this is a rental investment, consider a neighborhood with only a few rentals which tend to be more stable, more desirable and have better appreciation rates. Check the county records for the number of mailing addresses that are different than the property address. Does the condition of nearby homes support the improvements you will need to make? Comparing recent sales prices against your planned offer price is a good way to begin.

In the future look for:

  • How financial institutions handle the foreclosure process
  • Getting a handle on repairs: cosmetic vs. serious damage
  • Is buying a foreclosure for you

Fixing up a Fixer upper!

There is something out there called a HUD 203/K.

What is it and who’s it for? It’s for a homebuyer who wants to purchase a foreclosure home (an REO) but doesn’t have the necessary funds on hand to complete the repairs or modernization.

The Rehab program allows the buyer to secure just a fixed rate or adjustable mortgage to finance both the mortgage of the property AND the rehabilitation needs. It’s endorsed by HUD which in turn minimizes the risk to the mortgage lender.

Of course with all mortgages and financing of your home there are requirements that must be met. So talk with a lender today to find out if you qualify and would like to take advantage of this program.

Call us if you would like to discuss further how maybe purchasing a fixer upper might just be for you.

Should I get my short sale re-inspected?

Now wasn’t Wayne a sharp thinker with his post on getting a re-inspection on a short sale that’s taken months to come to fruition?

I’m curious how many REALTORS do recommend one…

Via Tigard Oregon Homes for Sale>> Wayne B. Pruner, GRI (Oregon First):

Should I get my short sale re-inspected?

Should I get my short sale re-inspected? I would say my answer to that is probably yes, depending on how much time has elapsed. I was talking to a new home owner last week. He purchased a short sale and the period between the home inspection and the closing of the short sale was nine months. The Seller continued to live in the house.

When he took possession of the home, it was apparent that no maintenance and very little cleaning had been done during that period. The carpets were very dirty, the furnace did not work, pipes had frozen and burst causing water damage in the bathroom and garage, all the rooms needed painting along with a good cleaninghome inspection, and a wind storm had damaged the roof, which had not been repaired and damaged the ceilings inside the house. None of these issues were present during the home inspection. His good deal, turned out to be not so good.

Short sales are not for the faint of heart and have unique issues. One of them is the length of time to complete the transaction. To protect yourself from the above scenario, write in your offer that a re-inspection will be necessary after a certain amount of time has elapsed, or that before closing a walk through is necessary and the house needs to be in the same condition as it was at the time of inspection. Banks insist that you buy the home in “as is” condition, but you should have the opportunity to amend the deal if the condition of the house changes substantially.

Wayne B. Pruner is a Realtor® at Oregon First, who works in the Tigard, Oregon area. I have extensive knowledge and experience in the Tigard area and I am ready to help you with all your real estate needs. I am also a licensed Oregon contractor with considerable experience remodeling and repairing homes. Wayne knows houses! My phone number is 503-891-0795. There is much information about buying and selling Tigard real estate at my website, Tigard Oregon Homes.

 

They won’t take MY home.. will they?

there's help

The ugly answer is yes they can.  After just 3 months of missing your home payments you’ll receive a demand letter; advising you have 30 days to bring your account current.  If you don’t or can’t your lender may begin foreclosure proceedings.

Being in financial trouble is a horrific feeling of inadequacy and helplessness.  And it can happen so quickly.  The loneliness and isolation feels like black gloom swirling inside of you.  You can’t talk about it with family and friends – there’s a stigma to being in debt.

For whatever the reason; the loss of a job, divorce, even over bearing medical expenses the fact remains you need help.  And there’s nothing to feel ashamed of…

Sometimes it feels as bad as being diagnosed with a terrible disease BUT nobody comes to support you…  you can’t go to a doctor to fix things…  or can you?

Now there is a place to call if you find yourself behind on a  mortgage payment – you can call the HOPE NOW Alliance at (888) 995-HOPE. Because the most important thing that you can do to help yourself right now – today – is communicate with your lenders.

For more information and help here in North Carolina review the Guide to Avoiding Foreclosure.

You do have options!  Please use them

One Solid Rock!About the author:  Pamela is with  The St. Peter HomeSelling Team at Prudential YSU Realty in the Triangle.

A team of passionate North Carolina Brokers dedicated to connecting their clients to success in home buying and selling in the Triangle.

Pamela can be reached via email at Pamela@RaleighHomesOnline.com or by calling (919) 645-2522.

For your real estate needs The St. Peter HomeSelling Team serves the following areas; Raleigh, Cary, Apex, Morrisville, Holly Springs, Fuquay Varina, Garner, Wake Forest

search the Raleigh TMLS

American Dream OR American Nightmare?

Rolesville NCI love living in North Carolina and working as a Raleigh Realtor.  And now more than ever I’m even prouder of my adopted home state…

North Carolina is one of a handful of states fighting hard to help people stay in their homes during these turbulent economic times.  They are working to help home owners in trouble by aggressively creating new programs and legislation.

 

NC is a member of the State Foreclosure Prevention Working Group which was created in 2007.  This group was designed to help mortgage groups stay off foreclosures and helps keep people in their homes.  It is comprised of attorney generals and state banking regulators from across the country.

NC has already passed legislation to curtail abusive lending practices by requiring lenders educate borrowers who may still want an ARM loan and disclose to them their repayment schedule including all the related costs such as property taxes and insurance.  Lenders are now required to verify income/employment.  Lenders today are prohibited from driving borrowers to higher cost loans.

Home ownership is still the American Dream and now North Carolina is working hard to ensure it doesn’t become the American Nightmare.

Your Raleigh Realtors

P.S – forgot to remind folks about where to go if they do need immediate help;

For foreclosure counseling call 1-888-995-HOPE

REO’s & Foreclosures

REO & Foreclosure informationWith all the hoopla going on these days about foreclosures I thought it might be helpful to pass along some information should you be looking to purchase a foreclosure home as your primary residence OR if you are looking to get started in investing in real estate. 

Just what is an REO and what does that mean to you? REO stands for Real Estate Owned – also commonly referred to as an “investment” or “bank owned” property. These homes have been foreclosed on some time ago and are currently owned and being sold by a financial institution. Many of these bank properties can represent good investment values; however they may not be well suited for everyone.

That being said let’s look at just what an REO is; First and most important thing to know is that the REO & Foreclosure informationproperty is being sold “As Is”, “Where Is”, “As Seen” and that the Seller will not perform any repairs. Also because the bank or asset company has never “lived” in the home they aren’t responsible to provide a Seller Residential Property Disclosure Statement. Foreclosures are exempt. The Seller also will not provide any appraisals, surveys, or warranties on the property. However most Sellers will allow a 10 day period of “due diligence” in order for you to perform any and all inspections that you would like to have done; like a home inspection, pest inspection, perhaps even a well and septic, or radon inspection. The cost incurred to have these inspections done are your responsibility but if for any reason these inspections indicate a problem area that you find unsatisfactory – you usually have the right to walk away from the offer and retain your earnest monies. (Be sure to confirm this with the Seller or listing agent beforehand)

OK – let’s say you see the value in a particular property and want to move forward. There are few issues I would like to mention to help your purchase be more smooth sailing. If you are securing financing to purchase this home you will need to secure a conventional mortgage; no FHA or VA loans are accepted. You will need to provide a mortgage pre-qualification letter along with your offer to purchase. Or if you are paying cash a Proof of Funds letter is required. You will also see an “As Is – Counter Offer Addendum” attached to the NC contract OR in some situations it will be provided only after an offer has been excepted.

Once your offer has been submitted patience is also a virtue here. Some Sellers can be very slow to respond to offers or to produce signed contracts once an offer has been accepted. AND PLEASE be very flexible with closing dates – most properties will not close sooner than 30 days – and as with any residential home sale – the Seller will not allow you to perform any repairs whatsoever prior to closing. And lastly – the keys to your new purchase will not be given out under any circumstances UNTIL the funds have been disbursed and the deed recorded.

Fritz's Picks

 

If you are interested in REO/Foreclosure properties you won’t want to miss signing up for information David Fritz from our team provides at Fritz’s Picks.

Please feel free to call or email us if you have any questions. The St. Peter HomeSelling Team is  very well versed in REO’s and can assist you in purchasing one of these homes as a 1st time home buyer or a seasoned investor.