Tips for Buying a Home in Foreclosure

If you are looking for an investment home, you might be interested in picking up a home that is in foreclosure. While buying a home that is in foreclosure can certainly be a great way to make some extra money, there are a few things you should keep in mind before moving forward. In this way, you can ensure the process is as smooth as possible for everyone involved.

Know Your State Laws and Regulations

When it comes to foreclosure, the proceedings vary from state to state. Therefore, even if you have purchased a home in foreclosure in the past, that doesn’t mean the proceedings will be the same if you are considering a purchase in another state. Similarly, if you are looking for homes for sale by owner on an MLS listing, keep in mind that the proceedings may be different on a home in a different state from where you live.

In some states, it is possible for homeowners to stay in a home for up to a year while going through foreclosure. This is particularly true in states where the mortgage system is used. In those where trust deeds are used, on the other hand, the owner may have only about four months before he or she has to vacate the premises.

Understand the Period of Redemption

Don’t get too excited about a purchase until the sale is finalized. Nearly every state allows the homeowner to enjoy a period of redemption. This means the owner has the right to take care of the financial default, which includes paying all of the costs of the foreclosure as well as paying back the missed principal payments and back interest. If the homeowner manages to accomplish this within the state’s designated timeframe, he or she can regain control of the home. Although this doesn’t happen often, it is possible. In order to gain a better understanding of how this works in your state, it is best to consult with a real estate lawyer.

Make Certain You Can Handle the Emotional Stress

When considering investing in a foreclosure, many people fail to think about the fate of the homeowner. More than likely, however, you will come face to face with the homeowner and the family that is losing its home. This is particularly true when it comes to homes that are for sale by owner. For many people, meeting those people that are losing their home can be quite upsetting and uncomfortable. Therefore, be certain you are mentally and emotionally prepared for this situation before you get started in the purchase process.

Homes go into foreclosure for many reasons. In some cases, the homeowner may have been laid off, fired, or unable to work due to medical problems. Others may have buried themselves in a debt they were unable to repay while others may be going through major life changes, such as divorce or the death of a loved one. These situations can be quite heartbreaking and can make an investor feel guilty about the purchase. At the same time, you may be helping the homeowner get out from beneath a burden that he or she can no longer carry. In that case, it can be a win-win situation for everyone involved.


About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

Online Real Estate Agents Gaining Access to MLS Listings

The Justice Department and the National Association of Realtors has reached a tentative agreement that is quite meaningful to those looking to purchase or sell a home. Prior to the settlement, it was quite difficult for real estate brokers based on the Internet to gain access to home-listing information. Under the terms of the settlement, however, online agents will be able to access more information through the Internet. As a result, those looking to buy a home will also be able to access more information. Not only is this good for those interesting in purchasing a home, it also provides sellers with greater exposure. As a result, they can potentially sell their homes much faster.

Why All of the Controversy?

Online real estate agents and agents that operate offline have been at odds for quite some time now. The main reason for the adversity is the fact that online real estate agents are able to offer their services at a discounted rate. They also provide their customers with the convenience of browsing through listings on their own. In order to try to even the playing field, many online real estate agents were unable to access the 800 Multiple Listing Services that were affiliated with the National Association of Realtors.

Obviously, those real estate agents that are conducting their business offline are concerned about making MLS listings available to online agents. After all, it could significantly reduce their commissions and more buyers may choose to work through an online agent rather than one that conducts business offline.

Changes are Afoot

Obviously, restricting online real estate agents from accessing MLS listings hardly seems fair to those that conduct their business online. As such, government lawyers filed suit in the fall of 2005 against the Realtors group. The lawyers claimed that restricting access was discriminatory toward online real estate agents.

Although the suit was filed in 2005, it was only recently that the two groups reached a settlement. The settlement has now been filed in Chicago and has made the MLS database accessible to traditional real estate agents as well as those that operate online.

Providing Consumers with Options

In addition to ending discriminatory practices, opening up the MLS listings is beneficial to consumers as well. In fact, the Federal Trade Commission and the Justice Department both concluded last year that restricting MLS access was denying consumers the benefits of the Internet. In other words, consumers have long been saving cash on goods and services with the help of the Internet. Yet, the same was not necessarily true when it came to purchasing real estate. The agencies concluded that the main reason real estate buyers were not benefiting from the Internet was because online agents were denied access to MLS listings.

Whether or not the MLS listing fiasco is the real barrier to using the Internet for real estate purchases remains to be seen. Nonetheless, consumers will certainly benefit when competition is increased among real estate agents – whether they exist online or off.


About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

How is Your Home’s Value Appraised?

When it comes to appraising the value of your home, you might be surprised by the vast difference in value of your home when compared to one that is nearby. In fact, in some cases, the appraised value of homes located right across the street can be much higher or much lower than the appraised value of your home. Why is there such a discrepancy in these values? The answer is simple: market value.

Calculating Market Value

In order to determine a market value, appraisers must crunch a variety of different numbers. Obviously, it is impossible to determine the true 100% market value of a home because every house across the nation is not put up for sale each year. Therefore, appraisers have to piece together a variety of information in order to determine the value of your home. This includes looking at the average percent change in value for homes in the neighborhood, which is based on sales information that is available. This information is then used to help determine of a home’s value.

If there is no recent sales information available for the neighborhood, the appraiser may look at similar homes in different communities instead. By looking at homes of similar size and with similar amenities, an appraiser can get a good idea of the value of the home. Nonetheless, the differences in neighborhoods needs to be taken into account, as some neighborhoods are simply more desirable to potential buyers than others. For example, a home located on a golf course is certainly going to have higher appraised value than one that is not, if all other attributes are similar.

Considering Special Circumstances

Of course, there are special circumstances about homes that can make their actual value different from others in the same market. For instance, if your home is located in a part of the neighborhood that is near a highway, your value will likely go down because of the noise and distraction of the highway. On the other hand, a home that is located on a corner lot or near to a park may have a higher appraised value because of the added land or convenience it brings to the homeowner.

Determining the value of a home in a neighborhood where the houses are of varying sizes can also be difficult. In some areas, where each home is of similar in size age and attributes, finding comparable sold homes is easy and appraisals are generally quite accurate. In the neighborhoods where this is not the case, however, the value of one home can be much less or much more than the value of the home located next door.

In order to get an accurate appraisal, a variety of factors need to be taken into consideration. In addition, it is important to remember that an appraisal is not a guarantee of the amount of money you can expect to get for your home. Rather, it is a good starting point for you to use when determining how much you would like to receive when selling your home.
Appraising is an “art”, not a “science”. If you hire two different appraisers to value your home, you most likely will get two different values.


About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

Making Money with a Fixer-Upper

If you are looking for a way to make a little extra cash, you may be considering purchasing a “fixer upper” and then making some renovations before putting the home on the market. In the industry, purchasing a home with the intention of selling it shortly after is referred to as “flipping,” and, while flipping can certainly be profitable, there are many things you should take into consideration before you purchase a fixer-upper and start making some changes to it.

Consider the Location
No matter what you do to a home, you won’t be able to make a profit on it if you purchase a home in a bad location. In fact, fixing up the home may actually make it nicer than the other homes in the neighborhood, which will make it even harder to sell. After all, who wants to purchase a nice home that is surrounded by run down houses? So, before you invest in a fixer-upper, make certain the entire neighborhood isn’t also in need of fixing.

Watch the Expenses
Before you purchase a fixer upper, you need to determine the extent of the damages. If the home is in need of major repairs, you likely won’t be able to recoup the cost of the repairs. If the home just needs cosmetic repairs, such as a new paint job or new flooring, you may be able to invest very little for a great return. Therefore, you need to be certain to inspect the home thoroughly and to have a clear idea of how much it will cost to fix it up before you make a purchase.

Assess Your Skills
You also need to be honest with yourself about your level of skill. While painting the walls may not be a problem, you may run into problems when it comes to changing plumbing or installing cabinetry. If you cannot do it yourself, you will need to hire a professional to get the work done. This, of course, can be quite costly. Similarly, if you do the work yourself and you do it poorly, the renovations will do little to improve the value of the home. In fact, it could cause the value to depreciate further.

Think About the Customer
When making renovations to a home with the intent to sell, you always need to keep the potential buyer in mind. Therefore, while you may love the idea of converting a bedroom into an office, most homebuyers are looking for homes with plenty of bedroom space. If they decide to convert a room, they can do that later. In order to attract the largest group of buyers, however, you should focus on providing a living room area, a dining room, and as many bedrooms as possible.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .