Posts (RSS)
Main | Minnesota Considers Legislation to Help Distressed Homeowners »
Cheap Homes through Foreclosure Laws: The Best Way to Buy
By jason | March 7, 2008
With the real estate and housing market practically at a standstill and property values at incredible lows as a result, cheap homes seem to be popping up all over. Citing the fact that low property values and low demand have created a “buyer’s market”, in which homebuyers and investors can afford to wait for the price that they want, all kinds of real estate vendors will try to convince you that cheap homes are available just about anywhere.
But if cheap homes are so plentiful, and you have all the time in the world, why buy just anything that comes along? Many investors these days are curious to find out what exactly the best way to buy cheap homes really is. Which cheap homes will offer not only good savings now, but also the potential for better investment value further down the road?
One of the many places people have turned to find the answer to this question is the foreclosure market. New reports indicate that foreclosures are at soaring rates, and this is in large part due to the slumping housing market. Finding themselves in situations where mortgage payments are simply too much to keep up with, homeowners are faced with defaults and the subsequent foreclosure proceedings that occur due to foreclosure laws allowing lenders to repossess and sell properties as ways of collecting mortgage debt.
These sales are where many investors and homebuyers are finding all kinds of opportunities for buying cheap homes. Since lenders must sell these properties according to foreclosure laws in order to collect the remaining loan debt and avoid a huge loss, they will often allow properties to be undersold provided they are able to earn a significant portion of the loan amount back.
But nowadays things are different. From December of 2006 to December of 2007, the national foreclosure rate nearly doubled, which means more foreclosure properties and cheap homes on the market. This is turn has made it extremely easy for buyers, since the flooded market has led to even bigger discounts on these already cheap homes.
Buying foreclosures is quickly becoming the best method of purchasing cheap homes that offer huge potential for value as investments. However, it’s important to understand which of these cheap homes will actually pay off the most in the long run.
The first thing to consider when looking at buying cheap homes available through foreclosure proceedings and foreclosure laws is to note where foreclosure rates, and thus foreclosure inventory, are highest. States like California, Massachusetts, Florida, Michigan, Texas and Colorado experienced some of the highest amounts of foreclosure activity in 2007, and investors have been finding incredible deals on cheap homes there. But don’t just go for the lowest price. Be sure to consider the potential of the home you are buying for greater value in the future. To do this, consider the area it is in. If you’re buying Texas foreclosure homes, cheap homes in Dallas, a growing city, are probably going to have more value than cheap homes in a rural area, simply because the chance for appreciation is greater.
Look for areas with good economies, school systems and job markets, as these are the areas with the most potential for growth, and where a cheap homes purchase has the most chance to pay off.
And keep your eye on the national scene. Foreclosure laws have led to a drastic rise in foreclosures nationally, but keep your eyes on local markets to see where cheap homes might be most plentiful.
Topics: Cheap Homes |
May 27th, 2008 at 2:41 pm
[...] Cheap Homes through Foreclosure Laws: The Best Way to Buy [...]