Month: April 2018

We’ve all heard tales of people buying foreclosed homes at bargain prices.  Websites and infomercials claim that you can find foreclosures for pennies on the dollar.  It sounds too good to be true and in most cases it is. While it is possible to find a good deal on a foreclosed home, it takes lots of research and persistence.  Most foreclosed houses sell for only slightly below market value, and those that sell for much less are few and far between.  There are also certain risks when dealing with foreclosed properties.

Many foreclosures are not in very good condition and this is sometimes one of the reasons that foreclosures sell more cheaply.  The former owners almost certainly went through a time of financial hardship and that often results in a poorly maintained home.  The owner may even purposely cause damage to the home when he realizes that foreclosure is imminent.

Another reason that a foreclosure may be offered at a lower price is because it is in a bad location.  Whether you’re planning to use the home as a residence or rent it out, location is important.  A home that is undesirably located will be more difficult to rent at a decent price, and living there could prove to be unbearable.

There are legal issues that the purchaser of a foreclosure may have to deal with as well.  If the previous owner still lives in the home, he will have to deal with eviction.  It is even possible that the lender may not have full ownership of the home, resulting in major legal woes.  Tax liabilities may be transferred to the new owner as well.

Foreclosures sold at auction pose their own unique risks.  Prospective buyers often do not get the opportunity to inspect the property for sale, so they have no indication of what condition it is in.  The full purchase price is often due in a matter of days, if not on the same day.  Buying foreclosures at auction is a risky proposition for the buyer and is usually not a good idea for first time homebuyers.

If you have the time and patience to actively look for good deals on foreclosures and the experience to know how to handle them once you’ve bought them, they can be worthwhile.  But they are usually not ideal for new homeowners.  There are many problems that can occur with them and a new homeowner does not need to be exposed to the risks involved.

Like many other types of investments, the major thing that you will want to show at the end of the process is a piece of paper.  This is the same concept with real estate.  The type of paper that you will want to hold at the end of the loan is either a title or a deed.  This will allow you to show the locality that you live in that you own the house and have paid off your loan.

A title is a document or evidence that you own the property or home that you have been paying off.  It can also mean that while someone else is on the property or land, an owner has the legal rights that are part of the property.  When you have a title as a piece of documentation, it will usually be matched in the records of the locality that you are at as well as by the one who has sold the property.  

A deed is a similar type of documentation that will be used in the process of gaining a title.  Oftentimes, those who are investing in real estate will receive a deed as a transaction paper to the title.  This shows that the person who will be getting the property has the right to the title as well as the right to the property.  Usually, there will be several legal factors and regulations that are bound to this type of documentation in order to make sure that the transaction is fair.  

When you are about to receive a title or a deed for a home or piece of property, there are several steps you will have to take.  First, a proof of insurance will have to be shown.  You will also need copies that prove that you bought the house.  The person who is selling you the home or property will also have to have these proofs for purchase.  This includes a purchase agreement, invoices, receipts from the mortgage and proof of satisfaction that the one who is buying the property has met all of the requirements for purchase of the property.  

The last step to making your home completely yours is to make sure that you have the title or deed in your hand.  By understanding the process of getting a title, and making sure that you walk into the final closing ready to make the exchange, you can own the piece of property that you have been working towards.

Getting into real estate property is based on the idea of money.  Your exchange of money will give you exactly what you want for a home.  Within each different type of loan that you decide to get will be different divisions on how you can pay off your home or office space.  If you know the terms and types of loans that are available to you, it will be easier to move your furniture into the right place.  

The first way that a loan will be divided is by the principal.  This is the amount that you will pay that the home is worth in total.  You will pay a percentage of this amount every month.  The second type of charge for the loan is an interest rate.  This will be a percentage that the lender you are working with will be able to keep because of their ability to loan you the money.  

Within each type of loan you will be able to get, there will be a division in how you pay both of these off.  It may mean that the interest rate or principle changes over a specific amount of time.  From here, you can add an escrow to your account, which will be like a savings account for your loan and won’t go towards paying off the house until you need the extra money.  

Within each type of these loans are different rules, regulations and ways to divide what you are going to be paying.  Different limitations for timing and the amount of money that you are able to pay are added into the loans.  If you want to make sure that you are getting the best deal, make sure that you understand how each part of the loan will work together.  

The main consideration that you will need to keep with your loan is how you will be paying off your home and where your money will go.  Each different part of the loan will be an investment that will show your ownership of the home later on.  By determining your needs, individual situation and what you believe will work best; you will have the ability to find the best possible loan.

Terms for investments are everywhere in real estate.  You may hear lenders, agents and brokers talking about real estate jargon.  If you are finding a way to be a part of the real estate world for any type of investment, you will want to become familiar with the different terms that are used in real estate.  The first one to define is comparable sales.  

Oftentimes, comparable sales will be termed as comps.  These will be the basis of your real estate investment and are important to know.  If you are looking at a property, always ask what the comps are on the property.  Your real estate agent, or you, will then look up a variety of factors to compare your property with the others around it.  You can find these through various companies, the multiple listing service, (MLS), and even courthouses and newspapers.  

Some of the comps that are included are the history of the property, the sales from the past, the sales of the other homes, the demographics of the area, and the different trends that have affected the sales.  Anything that will affect the investment that you plan to make on the home is what you will need to look up when considering comps.  

Why is it important to look up the comps? By doing this, you will know whether you are making the right investment or not.  Technically, the value of the home should go up.  At the same time, the value will need to be the same as the other homes.  If you don’t have a balance between the historical investments and the neighborhood investments, you could end up paying too much.  

When looking at cash flow, you should always begin with the comparable sales.  This will give you a good idea about what is happening with the real estate that you are interested in and whether it is worth your time and investment.  Finding the comps is the beginning to moving over the threshold and into your new home.