In this market, the majority of properties being sold are in distress, creating
pressure to lower prices from sellers who don’t have distressed properties. The overall reality and perception is that sellers have to sell, which isn’t great if you want to sell. So what are distressed properties? Distressed properties are: Bank Owned (REO), short sale (where the bank will take less than what is owed by the borrower), Deed in Lieu of Foreclosure (where the bank will take the property before foreclosure), and bankruptcy (where the home owner declares bankruptcy).
In all of these situations sellers of properties are at a disadvantage in that the buyers are used to distressed properties—and people—so they want to offer only what they can get away with, not what the property maybe worth. Markets all over the country have seen values drop by as much as 70 percent, creating a “bottom feeding” atmosphere. Clearly the need to make the property as marketable as possible, and to price accordingly, will dictate whether the property sells.
Home Buying Tips
What you need to know when buying a home.
Shore up your credit.
Unless you’ll be making an “all cash” offer, you’ll have to qualify for a mortgage. Make sure your credit history is as clean as possible.
A few months before you start house hunting, get copies of your credit report to make sure the facts are correct and that’ll you’ll have plenty of time to fix any of the problems you discover.
Get pre-approved.
There’s nothing worse than looking at houses you simply can’t afford. Getting pre-approved will save you the agony. Plus, you’ll be in a great position to make a serious offer when you’re ready. Pre-approval is not pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
Focus on what you can afford.
Make sure to use one of many calculators available online to get a better handle on your income, debts, and expenses and how they can affect what you can afford.
Choose between rate and points.
When choosing a mortgage, oftentimes you have the option of paying additional points, which is a portion of the interest that you pay at closing costs, in exchange for a lower interest rate. This can be a great strategy if you know you’ll be remaining in the house for five years or more.
Do your homework.
Before making your first offer on a house, make sure to research the sales trends in the areas.
A good school district matters.
Whether or not you have children, it’s always a good idea to buy a home in a good school district. When it’s time to sell this will be a strong selling point.
Hire a home inspector.
Know what you’re really getting into. A good home inspector will point out maintenance recommendations, life expectancies and minor imperfections, which are all good to know about and can affect your negotiations. However, a home inspector can also point out any significant defects, or issues that could potentially lead to major issues.
