| Is this the right time to buy a house? Should I buy from | | | | rid of the properties ASAP, and the longer they have |
| an auction? Should I buy from a for sale by owner? | | | | the property the more they want to get rid of it. The |
| Should I buy from a bank? | | | | more REOs that are in the area the more they will be |
| There are many advertisements on TV and | | | | willing to negotiate down (unlike a foreclosure sale |
| everywhere else from the National Association of | | | | where the price goes up) this are the clearance sales |
| Realtors telling you that this is the best time to buy a | | | | on the real estate properties! And this is the chance |
| house. The truth is that the economy is real bad right | | | | you have now to get the house of your dreams at |
| now, you may have experienced that, someone you | | | | dream like prices. I know of a beautiful home that was |
| know may be loosing his or her house. And house | | | | worth at one time seven hundred thousand dollars and |
| prices are dropping fast every day that passes by. | | | | the bank tried to sell it for five hundred thousand in a |
| Depending on where you live the houses prices may | | | | foreclosure sale and it ended up being sold in an REO |
| be falling as much as $500.00 dollars per day. So | | | | sale for two hundred forty thousand dollars. This of |
| should you buy from a Realtor? In a perfect world you | | | | course brought the values of all the houses around |
| should buy a house from a seller that has a realtor, | | | | down, but most importantly it made it easier to |
| and have your own realtor represent you and your | | | | negotiate down the prices of other houses around the |
| best interest. | | | | area. While the neighbor tried to sell his house for five |
| Well right now the way house prices are is like when | | | | hundred sixty thousand to try to salvage the equity |
| you go to buy a shirt, you can go to a store and buy it | | | | that he had in his house when this happened it wiped |
| overpriced at the emporium, you can go to the Target | | | | out his equity brining the price of his house down. |
| and get the same shirt in special, or you can go to | | | | So what are you to do? Buy REO's and use a real |
| Ross and get it at clearance prices. So basically if you | | | | estate agent that is used to negotiating and to do real |
| are buying it from a regular individual you are buying an | | | | negotiations with banks and with realtors to get you |
| overpriced home, they are trying to as much money | | | | the best price possible on the house that you like. Don't |
| as they can from the home, let's face it if you bought | | | | be afraid of making an offer that is too low, or thinking |
| your house for four hundred thousand and it is worth | | | | that you will offend the bank with a price that is too |
| three hundred thousand right now you want to sale it | | | | low. Remember this is the same bank that didn't want |
| for as much as you can and not be liable to the bank | | | | to negotiate with the original owners and decided that |
| for the other hundred thousand you will not be as | | | | it was more profitable to kick them out into the street. |
| willing to loose all that money. | | | | So negotiate with your wallet in mind and not with your |
| You could buy it in a short sale. A short sale is when | | | | heart or your emotions. |
| you buy a house at a price lower than what the | | | | Get your real estate agent to negotiate for you the |
| owner owes to the bank, this would be a good deal | | | | lowest price possible. Just like limbo "HOW LOW CAN |
| but is that the best deal out there? Sadly no. there are | | | | YOU GO?" if you send a low offer the worse that |
| other places you can look for an even better deal. As I | | | | can happen is that they send you a counter offer with |
| drive through Tracy and Stockton (in California) I see all | | | | a higher price. The longer the property has been in the |
| the houses that at one point used to cost six hundred | | | | market the more motivated the banks will be to sale |
| thousand and are in foreclosure. What causes a | | | | and to negotiate with you and give you what you ask |
| foreclosure? Well the financial situation of the person | | | | for (i.e. pay the commission for your real estate agent, |
| owning the house changed for some reason and they | | | | extra cash back for home repairs). |
| don't make as much as they were making or the bank | | | | Make sure that you get qualified for a loan before you |
| raised up the interest rates to a ridiculous rate and the | | | | start looking for a house, it is very difficult to get |
| owners can no longer afford to make the payments, | | | | qualified now a days and the banks are asking for you |
| maybe they went through their savings and were | | | | to walk on water and eat fire turn water to wine to |
| faced with either paying for gas and food (prices that | | | | get qualified for a loan... you have to have good credit |
| have gone through the roof) and all the basic | | | | (if you don't have good credit use a service to get |
| necessities, you know silly things like running water and | | | | your credit fixed) go all over your house look under the |
| electricity (hallmarks of a civilized society). So anyway | | | | cushions of every seat and collect every penny you |
| they stopped making the payments and after a few | | | | have you are going to need a down payment (15% |
| months the banks take possession of the house and | | | | should be OK but 20 is better) they will ask to see that |
| evict the residents from inside to sell the house in a | | | | you have reserves on your bank account to cover 6 |
| public auction at the steps of city hall. | | | | months of payments, so save as much money as you |
| Well you can buy a home at an auction, but in the | | | | can even if you have to eat rice and beans for six |
| auctions (now this is something that they don't tell you | | | | months the sacrifice will be worth it. Make sure you |
| in the TV infomercials) you have to pay for the house | | | | don't change jobs, don't think about quitting or buying |
| in cash, or cashiers checks, they don't let you get a | | | | that boat or the nice car. What ever you do don't die! It |
| loan or try to get some type of financing. When you | | | | will ruin your day and you will make your real estate |
| walk into the auction you have to have a series of | | | | agent cry (we just hate it when that happens). |
| cashier's checks and show that you can cover | | | | One last tip, don't use the same realtor that the bank is |
| whatever price the property that you are interested in | | | | using to represent them. Think about it would you go to |
| will cost you. Auctions are great for banks because | | | | your wife's attorney for advice in what to do about |
| people start to act like piranhas and they start going in | | | | your divorce? Would you go to your competition for |
| a bidding frenzy and although a house price might start | | | | advice on what to do to increase your business? So |
| in as little as forty thousand they can go very fast in | | | | get your own representative get someone that is |
| price to a hundreds of thousands of dollars. Even | | | | hungry someone that you can feed raw meat to be a |
| dough you might be able to get a good price here you | | | | mean negotiator (Grrrr!). |
| may not have a few hundred thousand dollars just | | | | In conclusion, the only way to buy cheap is to buy an |
| lying around your house. Plus why try to help the | | | | REO and negotiate the lowest price that you can. Get |
| banks? They did not touch their hearts when they | | | | prequalified before you start looking for houses, get all |
| were kicking the original owners out into the street. | | | | your ducks in a row, fix your credit blemishes, and right |
| Well there is a little known secret that banks don't | | | | now time is on your side, take your time and look for |
| want you to know. The al mighty "REO" this is short | | | | the place that you want. If the house is in foreclosure |
| for Real Estate Owned, this are the homes that didn't | | | | wait for it to be an REO, if someone is dumb enough |
| sell in the auction and now the bank is stuck with and | | | | to buy it at the foreclosure sale they are paying too |
| they sit on the street vacant and the bank is loosing | | | | much. Don't worry about the banks they got money |
| money on them every single day and if something | | | | from the government worry about your economy how |
| happens to the house the bank is responsible for it and | | | | are you going to make ends meet, and are the |
| if someone happened to get hurt inside the bank is | | | | payments going to be low enough for you to be able |
| also responsible for it and for anything that might | | | | to survive. If you know of someone that is going to |
| happen to the property as the owner of a home | | | | buy a home have them read this article before they |
| would be. | | | | make the worst mistakes of their lives. |
| When it comes to REOs the banks really want to get | | | | |