6 REASONS WHY IT’S A GREAT TIME TO BUY

The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.

1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.

2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.

3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.

4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.

5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.

6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.

BUYING FORECLOSURES AT THE AUCTION

foreclosure

Buying foreclosures from the County Courthouse steps is a lucrative and exciting full time business. Some of the wealthiest men in Colorado made their fortunes at these foreclosure sales. You must know 4 key things before you EVER attempt to make a purchase at one of these foreclosures auctions.

1. Take careful notes of the condition of the home the day before or two days before the foreclosures sale date. A lot can happen to an empty foreclosure home over time. It may not be in the same condition when it finally goes up for a foreclosure sale.

2. Make sure to pull a title report on the foreclosure sale property weeks before the auction. You need to know what loans and liens are placed against the property. Many of these liens will be wiped out at the foreclosures sale, but MANY will not. And probably most importantly, the position (rank) of the lender that you are paying off in the auction dictates which loans and liens will be wiped off and which will not. Knowing the position that you are buying into is critical. Conducting a title search beforehand will help you determine that position and the risk involved in buying the property. Many title companies will do a semi title search for you for FREE if you promise them your business in the future.

3. Foreclosure sales are a place of great competition at times. You must know your top number BEFORE you walk into the foreclosure sale. This number should take into account the cost of the repairs (that you double checked yesterday!), the cost of holding the property, and your expected sales price. DO NOT BID OVER YOUR TOP NUMBER! It can be easy to get caught up in a competition with another bidder. Do not get emotional. Walk away when the bidding has gone over your number.

4. Keep information on foreclosure sales that get postponed on the day that they were supposed to go to auction. Bankruptcies, seller negotiations, family issues, and lender leniency can all cause a foreclosure sale to be postponed. Track these homes and the new date that the sale has been postponed to. Other investors may not keep this information and will be caught off guard when the new future sale date arrives. That is one less investor competing against you for that foreclosure sale. Sometimes that is all it takes.