Buyers:

1. Should be looking for a "bargain". Don't let your heart rule your purchase.

2. With little cash should be looking at HUD homes which require only $100 down payment.

3. Looking for neighborhoods with few foreclosures as they are more stable and less likely to decline in value

4. Should be seeking the lowest interest rate with the smallest cost.

5. Should be taking their time...the market is going nowhere but lower, so don't rush yourself. But don't pass up some of the bargains available.

Sellers:

1. Should be staying put if possible. But if forced they....

2. Should put the home in the very best shape possible before marketing it.

3. Should price the home according to their subdivision comparables.

4. Should expect a longer time on the market.

5. Should be prepared to "work" with a potential buyer on closing cost, inspections, move in dates, etc.

Simple enough! 

Not always, but you would be very dumb to not scout these out first before buying a resale or new construction. There are simply too many to ignore and they are in all price ranges and locations, including new construction. Many builders have been foreclosed because they could not sell the new homes. I couldn't even tell you a sub that did not have at least one distressed property available. Banks, HUD, Fannie Mae and Freddie Mac are all discounting these home to move them so you stand a very good chance of getting a very good deal. Isn't that what everyone wants when they buy a home? I think so. You may have to look past some defects, wallpaper, repairs, etc to get into a bargain. To many people, this is difficult to do. They want their new home to look and feel "new" when they move in. Distressed homes must be bought "warts and all". But a little elbow grease and fix-ups can make it yours and you will have instant equity, which is not a bad thing when we are not sure how much more, or if, prices will fall. Open your mind and look past the problems and you will have a good chance of winning. Good luck!! 

Renters are certainly more plentiful in this market with all the foreclosures and we landlord should be prepared to take advantage of this wealth of good renters. It should be obvious, but many landlords don't seem to understand how they can attract better quality renters for their properties. Renters are much like buyers when it comes to what they expect when looking for a home. They expect the home to be neat, clean and in near perfect condition. If you try to rent a property that is dirty and unkept, you will be considered a "slum lord" and your renters will be low quality renters. A little paint, neat yard, clean carpet, well kept bathrooms, and spotless kitchens will garner you better renters who will pay more than market for your rental. So, do not be penny wise and pound foolish when preparing your rental property. I know this sounds too simple but it certainly works for me and it will for you. You also need to promptly address any problems that come up in the home. If you are slow getting to repairs and addressing problems, you stand to lose good renters. Since plumbing is the most often occurring problem, I set up with a local plumber to be "on call". I even give my renters his number so they can get any problem taken care of in a hurry. A little common sense certainly goes a long way to keeping your rentals full with good renters. 

An article I read recently had some very good "resolutions" I thought I would pass along to my readers. The author was not mentioned so I cannot forward credit.

BUYER RESOLUTIONS

1. I will get a loan prequalification before I shop for a home.

2. I will have clear goals set up to make the choice of homes.

3. I will not forego a home inspection, even on new construction.

4. I will compare several lenders to see which one is right for me.

5 I will use a buyer's agent to protect my interest.

SELLER RESOLUTIONS

1. I will not over-price my home in this market.

2. I will not limit showings to accomodate myself.

3. I will not wait on an offer to address needed repairs.

4. I will properly "stage" my home to sell.

5. I will make myself aware of "all" contract terms.

All this is very good advice, and I hope you will follow it.

 

I think this is a great time for real estate investing. Just a lot different than a few years ago. Then "flipping" was the way to make big money, not anymore. Flipping is gone for the foreseeable future. But, with the low prices homes are selling for right now and over the foreseeable future, it is an excellent time to build for the future. Over time home prices will surely rise as there is limited amount of land/homes and the birth rate is not going to stop. More demand will mean higher prices at some time in the future. Since so many people are losing their homes to foreclosure, there will be a greater number of people looking to rent while reestablishing their credit to purchase another home. A very good excess cash flow can be generated and a better quality renter is available. Positive cash flow and rising values are all good reasons for "buying and holding". If you have the excess credit available, I would strongly suggest you become a real estate investor!!

You bet it is!! I have been "in the business" for years and it is still confusing to me. Let me give you one example that might make it easier for you to understand how we got into this position. In late '06 I had a previous client, who I had assisted in buying a home 4 years earlier call me and indicated they wanted to buy a new home. Great, I thought! They told me they were pre-qualified and ready to go so I proceeded showing them homes in a 60K higher price range than their previous home. In the process of working with them I discovered they had lost their previous home to foreclosure. Wow, I wondered how they could be buying a higher priced home just 2 years from losing one to foreclosure. I know credit was easy and plentiful but my preferred lenders could not get them financed. At any rate, they had the pre-qual so we found a new sub that had homes that suited their desires. This was one of the big national builders and had their own mortgage division. I held my breath as they spoke with the mortgage division for approval of their purchase. Surprise, surprise, not only were they approved to purchase, but all their closing cost will be paid by the seller, zero down payment would be required and they will be getting a 2% lower interest rate for the first 2 years. Absolutely amazing! But I am an agent, not a mortgage company so I proceeded with the sale and it did, indeed, close. I have not checked up to see if they are still in the home, making payments, etc. but left wondering what would happen in 2 years (late '08) when the payment go up. Not there yet, but this is an example of people not qualified still getting a loan they may not be able to pay back. This was going on all over the country and many of these buyers were not able to make the higher payment and end up in foreclosure. Who's fault is it? Well, in my opinion, the goverment is somewhat at fault for the loose standards for loans, the builders and mortgage companies are at fault for being more concerned with selling the home and pocketing the profit from the sale and the buyer is at fault for going in over their head. Even I deserve some of the blame for going along with a purchase like this. Plenty of blame to go around. This example is not, by any means, the full answer to the crisis but just a symtom of the excesses that were going on to bring about a "Housing Crisis". 

In a recent survey over half of the real estate brokers across the country reported a decline in housing inventory in their market. This sound like a real improvement since inventory much match buyers to have the market begin to stabilize and thus improve. Even if accurate, I'm afraid this may be a temporary thing and conditions may actually get worse before they get better. I fear the large job losses are going to create even more foreclosures and our goverment is still doing little to alleviate this crisis. Out of work people are going to have a very difficult time staying current on their mortgage and without help we could see many more foreclosure coming on the market. Perhaps the new administration's economic plan will address this, but I'm always skeptical of positive goverment action so we will just have to wait and see.

Credit is at once a boon and a disaster. It enables you to live very well and at the same time can curb your life style. A true double edged sword. We have moved from a mailbox full of credit offers and easy mortgages to a severe shortage of either in a very short time. Not only are mortgages much harder to get but EXISTING credit is being taken away. Many homeowners with a home equity line of credit are seeing the credit disappear. Commercial investors are seeing no money available at all and credit card companies have tightened up greatly. It seems some credit card companies are lowering your borrowing limits for such unheard of reasons as where you live, if the housing market is down so is your credit limit, and now they are even considering where you shop as a reason to lower your credit limits!! This is not limited to slow payers but effects even perfect payers! This is not all bad, as we have too easy credit for a long time, but changing the rules in the middle of the game seems, somehow unfair. Just a sign of the times I guess.