Everyone wants a great deal, but there are changes in real estate markets that make some types of deals more easy to get than other types of deals which used to bring good returns. Currently, the media is pushing "Buy Pre-foreclosure!" as their mantra.
Is it true?
Right now there are a lot of people who are trying to sell their homes to get out from under their mortgages. Many of the listing prices for these homes are undervalued and the sellers have NOT YET started to communicate with their mortgage holders to get permission to sell these homes at these low, low prices. (I'll be writing an article about short sales soon, explaining what they are and how they are impacting the market.)
Some of these homes seem like a great deal, but without the lender's permission to sell at that low, low price, you may be wasting your time trying to buy the home at (or near) the offered price.
Also, these short sales can take an extraordinary amount of time and work (for all parties) to bring to a close. If you are in a hurry to move in, buying a short sale will likely NOT be an option for you. These sales can easily take three to four months to close.
So what CAN you purchase that you can negotiate a great price for? Two types of properties: A newly constructed property buying directly from the builder, and an older home that has been owned "for years" and has a low mortgage on it in relation to its current market value. And the "bank owned" properties are becoming the hot property right now.
These projects were started a few years back (buying the land, getting plans made, getting the plans approved by the local government or building committee), borrowing money for the project, etc. The big building projects like townhomes or new condos have been under way for a long time. Now that the market is a "buyerís market" they are having to compete with a lot of other homes available for sale. These builders usually have heavy construction loans and have to sell something in order to keep their cash flow going well. Several of the local builders have lowered their prices substantially to stimulate some contracts (sales) in their communities and the prices are unbelievable! We havenít seen new-construction pricing this low in a long time!
Iím not talking about a project that hasnít been started yet; one not due to be built for two or three years. Iím talking about the condo and townhome projects that have been started in the last year and are almost completed. These builders must sell!
So if you would like a NEW home, these are your best deals to be had NOW.
Once the market picks up (as it will) these great deals will go away as the prices rise and rise back to regular market pricing.
Iím familiar with a lot of the current NEW construction projects here in Pinellas County, Florida. I can help you get a great bargain on your new NEW home.
Imagine a house purchased 10 years ago for "peanuts" (or what seems like peanuts to todayís prices) and the owner hasnít refinanced since they bought it. Such a home is probably 60%Ė80% equity. The house might be on the market because the owner passed away, the seller moved out of state, or the lifestyle of the seller has changed drastically and they need to sell to get a different home. When considering this type of home, you can negotiate with the seller and possibly get a really good deal. Thatís because there is so much non-mortgaged equity in the home that the seller may be able to afford to sell it for less than market value. Itís worth trying to negotiate on such a house.
I have access to public records in such a way that I can tell you if the house you are considering to purchase has a lot of equity and may be "negotiable".
Of course all sales are negotiable, but imagine that a house being offered at $200,000 with a $180,000 mortgage due is not very negotiable. But the house offered at $200,000 that was bought for $75,000 ten years ago... now that is negotiable!
Right now, I'm seeing the bank-owned properties being priced the lowest with the ability to buy these fairly quickly (not like the short-sales which take a long time).
My theory is that the banks are swamped with foreclosed properties right now and they need to offload some of them. So they pick a sampling and say "SELL THESE RIGHT NOW!" And the realtors list them and put them on the market as some astonishing prices.
The ones with the lowest prices (compared to their "value") are the ones that are selling like hotcakes. But there are some great deals to be had in this category.
© 2007 Ruth Lorenzen. All rights reserved.