Buy a House Fast

The housing market is swollen with distressed homes.  Should you buy one?

First, before you fall in love with that low, low price, the savvy buyer of a “distressed home” should follow the same guidelines as a conventional buyer. Where is the home?  Is it convenient to work, school, church, shopping, mama – any place where proximity is a necessity.  Is the neighborhood appealing to you?  You may like suburban sprawl or tightly packed town homes, but the physical layout of the neighborhood should be appropriate.

Will the amenities of the area disrupt your life or prevent future resale?  A place across from a dump, next to a freeway, or under a railroad bridge may not be  a great place to live even though house is a palace.  Location, location, location is still a tried-and-true mantra when investing in a home.  It always rings true that you can change the house but you can’t change the location.

One interesting tip, whether you are buying any home, distressed or not: visit your potential home at various times of the day.  Just as light changes the tones of paint inside a home, you may find that the neighborhood experiences different “tones” at different times of the day.  Train, airport, or commuter noise can be a post-purchase surprise if you were shown the home during off hours.  Is there a noisy day-care or school in the neighborhood?  Do the neighbors have dogs that bark at night that you never noticed when you were shown the home at 9:00 a.m.?  One buyer lamented that his Realtor® took him to see a property from one direction.  When the buyer took his own vehicle back to that same property he traveled the opposite way and there was a junk yard across the road that could only be seen from a certain vantage point – the Realtor® had failed to disclose the “minor” problem.  It was a deal breaker.

Remember the movie Money Pit?  It was a very funny movie, but not if that house were really yours.  If you have the skill sets to tackle a major or minor remodel–and by skill sets I mean more than watching one show on HGTV–by all means, consider a fixer-upper!  If your dream house is the worst house on the block, you can add real value and have that great house that others passed by because they couldn’t see past the 1960′s wallpaper or avocado green shag carpeting.  If the problems are greater than what you can handle, make sure to get some professional estimates of the cost to renovate.

If the location is right and you have the skills or money to fix it, buy that distressed property! You’ll not only improve a neighborhood but bring a great house back to life!  Express Realty Services can help you find a distressed house that needs work or one where the work has been done for you. Contact Express Realty Services for information.

Owners who intend to live in their homes may be the focus of many current Federal programs, but the investor who buys a home to rent or renovate before renting is an important part of the housing picture these days. Investors plan on making a profit– never a dirty word in America!  Until now, would-be buyers could not obtain FHA financing on a home owned for less than 90 days.  Investors, who can often renovate and resell the home within three months, offer a stock of homes which often appealed to first time buyers who were then unable to find financing.

A new policy announced by HUD Secretary Shaun Donavan lifts the restrictions for buyers who are likely to buy HUD-owner properties, bank-owned properties, or homes purchased directly from sellers with an eye to “flipping” them—rehabbing them and putting them back on the market.  The move, effective for one year starting February 1, 2010, was approved to aid the current foreclosure crisis.

The theory is that the move will get homes in the hands of owner-occupants more quickly, which will in turn, aid neighborhood stabilization. Not only are empty homes often an eyesore, but they pose safety hazards and are an invitation to vandals to drop by and strip them of wiring, plumbing, and appliances.  The new law allows “flippers” to fix the homes and take their money and run, after selling the home to someone unlikely to qualify for traditional financing.

Given that the current housing stock is increased daily with bank-owned homes and other distressed properties, this gets the properties in salable condition more quickly.  Many buyers who are attracted by the lower prices attached to distressed properties are often unable or unwilling to do the renovations need to make the house livable.  Once the home is fixed up a bit, buyers are more interested taking the plunge.

The new program has some restrictions intended to prevent abuse:

• No sales to little Timmy or to Uncle Bob—sales must be arm’s-length.
• Lenders must meet certain criteria if the home is being sold for more than 20% of the seller’s acquisition cost.
• Only works with forward mortgages.
• Doesn’t apply to Home Equity Conversion Mortgages (HECM).

In the past, “flipping” acquired a bad name, as investors would resell homes at inflated prices to unsuspecting buyers.  When the homes, often barely renovated, were then financed with high interest loans, buyers were left with worthless properties and high mortgages.

For more, information, read the full text of the new policy at the HUD website, then give Express Realty Services a call if you are interested in buying or selling. express Realty Services guarantees to sell your home in under 60 days, or we will buy it.