Although, we are still experiencing a downturn in our economy, and many people are finding it harder to pay their bills, buy food, gas and other resources, this is still one of the best times in years to buy a house or invest in stocks. You need to learn how to dance with the rhythm of hard times, while looking for the opportunities that are staring at you.
For instance, people need to remember, this recession will not last, none of them do and this one will surely pass. It just may not pass as quickly as the last few. However, the key is learning how to survive and maintain your position during a recession.
How?
Easy does it, become a spendthrift, pack your lunch, plan your trips to the store..., work part time after your day job, don't eat out, become conservative in your lifestyle and thinking.
So, how does one justify buying a house during a recession?
If you are one of the lucky ones that's still employed and have saved for a downpayment you are way ahead of the game. You will be able to buy a home at an incredible low prices (not offered in years) with many bells and whistles! Not only will sellers offer incentives, but they will offer closing help too. And if they don't offer, ask for it. Most likely they will concede, if they have to sell or want to sell. This is the time to buy, especially if you are lucky and patient enough to buy a bank owned, short sale. Not to mention all the mortgage deductions and tax credits the government is offering. In addition to the low interest rates!!
Is a short sale, foreclosure or bank owned property a risky investment, given the horror stories online?
Typically, I would say yes, however, now that I am more experienced with the process and understand what it takes to provide the best service to my client, I would say, "No" with tongue in cheek.
Why?
Because, it all depends on the selling and buying agent's experience, their tenacity, their patience and their clients, and the bank(s) holding the mortgage. I believe if your agent understands that it is hard work making a distressed property sell; you have a good chance of buying a great deal! The buying agent also needs to be pro-active, be a good communicator and be ready to respond quickly when the selling agents requests documentation. I personally, think it is a dance and you have to move when the other party says, "cha cha" or when the bank says, "Were ready to play ball".
Aren't the bank's addendums one sided in a distressed property sale?
Well, it definitely seems that way. In fact, if you let your attorney read them, he/she will surely recommend that you don't sign them. However, there is certainly some protection for you as the buyer. For example, you will definitely, get a clean title or there will be no settlement. And, if you are going FHA- there will have to be some repairs according to the guidelines for bank owned. Now, you can perform a home inspection without expecting any repairs from the sellers, but you can always have an addendum with a clause letting you get out of the contract if you find something unsatisfactory in REO homes. So, again, it is up to your agent to know these things and guide you how to go about securing your position.
What are the bank's addendums?
You are a newbie, (wink, wink:) if you haven't experienced or read a bad batch of bank addendums. That just tells me you have never gotten to first base. That is one of the keys your agent should do for you. Before you go off the deep end, your agent should know who you would be dealing with. And there are some banks you should stay away from, far, far away. Run the other way and don't look back.
What do you offer?
I provide you with alot of communication and distressed property education via- emailing, texting, twitter, blogging, by phone, or by using skype. I once spoke to a potential buyer from the middle east using skype. I am still trying to find him some property and building our online relationship. If you are considering a short sale- I can walk you through it, hold your hand, help you prepare the hardship letter, call your lender on your behalf, prepare the paperwork, develop a relationship with the negotiator and become a squeaky wheel on your behalf. If you want to buy a bank owned property, I can help you decipher the process and research the players before we write the offer.
