If you have been trying to save enough to purchase a house over the last few years, then this economic downturn in the real estate market, might just give you the break you need.
Unfortunately, foreclosures are going on all over. This is a sad situation, since there was such a real estate boom just a couple of years ago, and now there is a foreclosure boom going on.
But that being said, it can still take weeks and months to purchase a home in foreclosure. You would think it would be quick, since the lender would want to recoup their money, but now it has to go through more levels at a sale, or more legal red tape.
If you are lucky enough to still have a good job, and your credit rating is good, and you are in the market for a house, then this is a good time to buy. Buying in this market, though, means you will need to hang on to your house for a few years for it to go up in value. But real estate has always been a good long term investment, even if it looks bad right now.
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What is Pre-Forclosure
If you are willing to buy in for the long term, then one of the best houses to look at are "pre-foreclosures" these are houses that have not yet entered the foreclosure stage. These are houses that are for sale by the owner, usually through a real estate, with a sense of urgency to sell.
A homeowner in this situation, wants to protect his credit rating and score, and knows he can't keep this house up or the payments for any length of time. Possibly he sees his hours being cut at work, or his rates are going up, or he simply is scared and wants out before he starts missing payments. He may even be at the stage of "interest only" or lowered payments by his lender to help. But has made the decision to "sell up"
There are many deals to be had this way. Purchasing a 'pre-foreclosure" house, can mean a much shorter closing date, and less hoops to jump through. But since the market is slowly rising again, there are many people just like you, wanting to take advantage of these record low prices. You need to be ready to jump.
Get yourself pre-approved by your lender, this way you know exactly how much you can spend. Make sure you can show your lender you are a good risk. Have as big a down payment as possible, lenders are a bit more anxious when approving home buyers now.
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Work With an Agent Familiar with Pre-Forclosures
Work with an agent you like, and one that knows what you are looking for, and he can do the homework necessary to find a house for the best price in the area. To get the best price from a anxious seller, you may need to be prepared to take risks such as buying in "as is condition", you may not get to go back and forth with inspectors or haggle too much on the price. They may offer a rock bottom price, but be firm on it. This may be the price they need to get out of their mortgage.
So, be prepared to move quickly. Some of these homes that are in "pre-foreclosure" are going fast, as the homeowner is selling it rather than the bank. This can make for a quick sale for them and you, and shorter closing dates.
If you have been waiting to get into the real estate market, now could be the best time for you, to get the best price possible. After hitting rock bottom, the real estate market, has no other choice but to head UP! Get yourself a good agent, and find a good deal. Finding someone who wants out of their house now, or pre-foreclosure could be your best deal going.