There are several key advantages of buying a foreclosed home it could be tremendously rewarding as far as investment is concerned. It is crucial to ask questions before purchasing a foreclosed property like – for how long has the property been on the market? You’ll be paying cash or mortgaging? How much money will you have after the purchase? So on so forth, if you have answers for such questions then you are rolling in the right direction where it clearly gives a heads up for purchasing it.
We would also like to enlighten you further on the ways to buy a foreclosed property as it comes in multiple forms like short sales or pre-foreclosures, we hope it helps you get the right property.
Buying Foreclosed Property Through Auctions
It is essential for you to understand that foreclosed properties are sold as-is. If the house has shabby exteriors of worn-out floors, the property will be auctioned anyway with prevailing faults.
The home buying process is much simpler in auctions where the highest bidder wins even if it is for a small amount this particular type of bidding is known as an absolute bid. There is another way of bidding also called as the reserve bid in which the property has to be auctioned for the given price or else the lender gets the title. The purpose of selling foreclosed properties is to achieve the highest price on them.
If you have made up your mind to buy a foreclosed home through an auction then for obvious reasons, you won’t be able to get your hands on a walkthrough. Paying for an unevaluated property could be a bane for your pocket as there are clear chances you’ll end up paying a lot more than anticipated due to additional repairs that come later in the play. As soon as you buy the house, you are designated as the rightful homeowner of the property where eventually you stand liable for all the necessary home improvements that occur post purchasing.
Hence, even if you have bought the property for a cheaper cost through traditional way, repairs can make your pockets bleed money. Do your thorough research and talk with brokers who are willing to work with you and try not to go into the process blindly.
Buying Foreclosed Property Through Banks
There are mainly two types of foreclosed homes which are –
- REO(Real Estate Owned) Properties
- Bank Owned Properties
Both of the above foreclosed properties are under the ownership of the lender which is mostly the bank, the only way of differentiation is the stage of the foreclosure process. Before you proceed with the buying of the property at auctions or through banks make sure you get a mortgage.
Whereas buying a foreclosed property through cash could be the soundest option it may be not so feasible for many homebuyers. If you have thoughts on buying a foreclosed property with the help of a loan then it is advisable to prequalify and get a preapproval letter before you start with the research and proceed with the home buying process. The latest preapproval letter from the lender or bank will aid in providing detail of how much money you can have in the form of a loan, based on the lender’s evaluation of your credit score or income.
Buying Foreclosed Property Through Brokers
The professionals know the best, real estate agents are highly experienced in their stream they will assess your property inclusive of factors like the current condition of the house, locality, and neighborhood. If you are a first-time foreclosure buyer we advise you to get in touch with a broker who knows the tricks of the trade as far as REOs come into play. Hiring a real estate agent would surprisingly cut down your legwork and time and steer to your desired property.
Although it is the most advised suggestion for new home buyers, we would also like to inform that buying a distressed property through agents could be rash on the budget as you will have to pay the commission costs to him or her which makes it less fair deal.
Make Cash Offer On House In Foreclosure
There are companies that buy houses for cash in New York and sell it to you post flipping. ‘Elite Properties’ is one such company that help buyers and provide necessary services to those who are facing foreclosure, they will also help you in stopping foreclosure. These companies buy the foreclosed properties and renovate it by providing necessary amenities to the future consumer. They do the primary improvements like sewage repairs and HVAC repairs including some renovation of tiles or ceilings. Furthermore, these remodeled properties are listed out in the market for sale at modest prices for homebuyers that wish to buy foreclosed properties at reasonable prices.
Companies that buy house for cash are saviors if you are running out of time, but have your eyes on the dream property. By paying cash for foreclosure properties, you can buy your dream house without worrying about the renovation, as all you get is brand new properties with no flaws. They will propose the final deal and give you a moving date according to your specifications. All you have to do is finalize the cash offer and get things done. You require no paperwork or any kind of legalizations at all.
Last Words Before Purchasing A Foreclosed Property
Given above were the four ways of buying foreclosed properties. After reading the blog above, you will be able to make better decisions for yourself that will take you closer to buying your dream home even if it is a distressed property. If you are residing in New York City and wish to buy and sell properties then get in touch with ‘Elite Properties’ they will provide you with the exact solutions for all your real estate crisis and guide you through the right path.
The home buying process has many different aspects to it which are linked together. One has to conceive it thoroughly and get to know all the fundamentals in the world of real estate. One of the major element of it is ‘Property Chain’.
Here, we will be explaining, everything about property chain. Scroll down to dive in deep.
What Is A Property Chain?
To be explained into simple words, property chain is a full-fledged system where people buy and sell properties from one person to another, meaning; when you a buy a home from someone, they’ll be moving to a new house, which eventually means even they have purchased the place from someone so on and so forth, it continues. This type of transaction is known as an upward chain.
A property chain mainly consists of two people or two parties (i.e. the sellers or buyers). Further, it can increase the number of people involved. The linking starts with an individual who yearns to buy a house and ends on the one who only wishes to sell and not buy these are two different things. The case is different when you buy the home for the first time; first time buyers’ chain only moves upward in the same direction reason, you do not have to sell a property for buying a new one.
The transactions or chains consist of many people namely a chartered surveyor, mortgage lender, appraiser, real estate agent and many more, which means more addition to the rest. It is required for everyone to fulfill their due-diligence in a timely manner so that the process doesn’t lack behind. If anyone from the chain fails to do so the progress of the process will decline to lead to a slower pace of the sale process.
Points To Consider While In A Property Chain
As the home sale process has many chores that have to be achieved in the given time frame, like getting an approved mortgage with specified principles including the closing date; the process can be time-consuming and lengthy. While conducting these steps, there is a high chance of missing out on things which could delay the deal.
Provided below are some of the points you could keep in mind while transacting properties-
- A pre-hand mortgage with agreed principle
- Making a deal and agreeing upon property SSTC. (Agreeing upon SSTC means the offer proposed by the buyer has been accepted by the seller but hasn’t completed the legalizations or paperwork.)
- Hiring a solicitor
- Arranging legal surveyors
- Finalizing the mortgage with the lender
- Exchanging agreements and closing dates
Ways Of Skipping Property Chains
Here are some ways out to skip the property chain –
Choose a first-time buyer, as they are not in chain.
Sell your house fast for cash and move in for a rented lodging. By doing this you are eluding yourself from the chain. This could be an advantage for you while making a deal, as a chain-free buyer, you’ll be enticing more sellers.
If you have your finances in place and are looking for multiple options in property, always opt for upward chains which are short. Example: if the seller has a second property and doesn’t plan to move in it voila, you are sorted.
If you have to sell your property, a real estate developer may ask for a part-exchange. Here the developer will purchase your property as-is to make it a fast-paced process although, as they will be buying home in an as-is condition you are not expected to keep hopes of high returns.
If you are in a tearing rush, you can find a seller who agrees upon the move-out date regardless of they have a property previously bought or not. Sellers in some cases eventually end up agreeing to move for a semi-permanent stay as they want to skip the chain.
Why Chains Fall-through?
There are many possible reasons for a chain to fall-through, according to a survey around three cases out ten i.e. 28% have witnessed major fall-through while purchasing properties. In many cases, the major fall through occurs from buyers side and the rest remaining were sellers who pulled out the deal as the process is apparently prolonging and energy-consuming.
There are many other reasons combined for a property chain to collapse –
- When a buyer or seller changes their mind for not continuing with transactions
- Surveys revealing major property catastrophes
- Buyer or seller loses jobs, falls ill or any other personal reasons
- The buyer cannot make up to the required mortgage loan for what they previously agreed on.
- Legalizations and paperwork stays held or is prolonging
As a piece of advice, it is highly recommended- if you are going through from any of the above situations you should sort them prior to finalizing or even making an offer. If you are on the seller’s side make sure your real estate agent does his due – diligence and assures that the buyer is not suffering from any of the reasons stated above.
How To Break-free From The Property Chain
When you are in a chain, losing a purchase would cost you thousands of dollars. Breaking the chain is the possible thing you could do, there are three ways to break the property chain.
Sell Before Buy Later – here for simultaneous purchases you don’t have to negotiate on the price or time and as a bonus, the seller will reduce their prices reason being they will be selling the property with a tag of chain-free.
Obtain A Bridging Loan –bridging loan allows you to purchase your dream home. If the sale process prolongs then repayment could be pricey over the duration.
Extension Of The Current Mortgage –collecting money over the present property will help you contribute to deposit money for your new place or you could rent a part of your residence to meet the mortgage payment.
Hope we were able to counter your queries about property chains if you want to know more about them or any real estate related crisis we will be happy to help with a solution. If you are residing in New York then get in touch with us at ‘Elite Properties ’, we’ll be happy to cater to all your queries.
One should have immense knowledge about home buying process, as it has a lot of misconceptions and confusions. Since you are a newbie, this surely is going to be a complicated process as the knowledge you conceive about the real estate market differs because it is an ever-evolving market. Buyers would likely fall into the pothole of delusions, without comprehending the facts about the home buying process.
Therefore, here we are providing you with some of the myths and facts of home buying.
A Near Perfect Credit Score
First off, credit score is nothing but a number that you as a buyer will be evaluated on for verification and eligibility of buying an asset. Your credit score shows the managerial aspect of your finances. It has nothing to do with home buying. Credit scores are evaluated on factors like your revenue source, assets, and employment history which has your salary statement on track. So when you have this myth on your mind that you should necessarily have a perfect credit score, you have a piece of good news below.
The myth-buster here is that – There is a fundamental understanding that if your credit score is high you would be able to repay the debts much easier hence you are seen as a loyal remunerator and, ultimately you are not on the financial uncertainty from the creditor’s perspective. In fact, there are some loans under the special category for people who have low-end credit scores.
20% Down Payment Is a Must
Rationally, when you are buying a property, you’ll have to pay a minimum of 20% of the total amount of the home, again a misconception which has a hidden fact that people should know. If you do so, that is paying the ideal percentage, you are saving a lot of money in the form of additional interest, which you are liable to pay covering the span of your loan.
The reality is – As 20% is recognized an ideal percentage to put down, but it isn’t mandatory if you are considering for applying for a (Federal Housing Administration) FHA or (Veterans Affairs) VA loan. You can put down as less as 3% – 3.5% on the desired property, although you should be thorough with the terms and condition as these are Government-backed loans, come with higher restrictions on credits and other finances. Whereas, there are some cases where there is no down payment required at all if the buyer is qualified.
30 Year Loan, Best Policy
A 30-year loan is the most convenient option for home buyers, this is the most common myth between buyers. Homeowners opt for the particular loan category because it strikes down the increased interest rates and also provides you with a lot of time to repay the outstanding debts.
But again as a buyer, the actual fact is; it is not compulsory if you have your finances in place. You can pick a 10, 15, or a 20 year fixed- rate mortgage. Choosing this option will cut down your time but, it will also increase your monthly payments. In such a scenario, you have to be confident about the feasibility of repayments that would strike down your other expenses.
Buying Home For the First Time Is Unapproachable
There is a myth around people for endless years that buying home for the first time is nearly unapproachable. But the reality is if you have a reliable company and good guidance home buying process is as smooth as butter.
Definitely, home buying is one of the most complex phases of your life, buying a home is every individual’s dream and to turn this dream into reality ‘Elite Properties in New York’ will help you in the journey. We have extended knowledge in home buying and local housing market, adding to it our real estate agents are genuine and hold expertise in all the real estate related problems which make the process of buying home effortless.
It’s Only About The Monthly Payments
There is a big misconception that buying a home only revolves around monthly payments, which is a lie. Whereas the truth is, when you are planning on an estimate, there are many other factors that come into play inclusive of monthly payments like added upfront closing costs, insurance, property tax, maintenance and many more. When you consider all of the above, you would be able to calculate the expenses and make a realistic budget.
Your monthly mortgage payments also have various components to it like principal, interest, escrow payment, and Private Mortgage Insurance (PMI) these components make up the total of your monthly payments.
Buying Over Renting Is Best Option
As the myth revolves it states, renting sounds the best option around, you might want to recheck once. The fact is – When you buy a home, you would be paying homeowner’s insurance which is higher than the renter’s insurance, although you won’t be entitled to pay for the maintenance and repairs whatsoever, which is a better deal. It is considered essential to weigh both options before landing on a specific decision. As renting a home could be more economically feasible, buying a home on the other hand would be a stable investment that wouldn’t require upfront charges for extra luxury.
One could be easily duped by the home buying myths and facts, but our objective is to drive homebuyers on the right path and provide them with their dream property. Whether you are a first-time home buyer or you want to sell your house for cash, we at ‘Elite Properties’, cater to all the real estate problems and give you the most accurate and helpful solutions.
Now, you can decide the best thing is for you and rest assured you won’t fall for fallacies. This will help you buy the home of your dreams.
As we have taken a step in 2019, there are a bunch of questions that jump in every individual’s mind. Similarly applied to the real estate sector as well, do we see innovative opportunities coming in the market or it will be a downfall in the economy? As 2018 was a year full of developments and technologies, let us have a look at some real estate forecasts and predictions for the year 2019.
The real estate market is broad and demanding, and it becomes difficult for the Government to meet the requirements of the civilians. As there is a massive rise in the allowance of building permits, it is highly possible for us to see new constructions gaining numbers in a majority.
A study from the experts reveals, that the percentage of single-family permits issued nationwide has progressed by 8.4% compared to the year 2017 till 2018. The housing market is a gradually retrieving, and the process of filing of permits till receiving the end product consumes time, the market will eventually go through the lack of supplies leading to less listed homes.
New Technology Usage
Use of technology entices buyers. How does this work? Things like virtual staging, walkthroughs, and adoption of VR headsets – where people soak in the 3D visualization and experience of being in their dream home, capturing top shots of the property and landscape through drones – provides a 360-degree view and easy listing on MLS, using Chabot’s on websites and web applications for real estate which aids in saving money and time.
Added to these there is also a trend of Blockchain (is a stage where transactions or trades are carried, through digital currencies) which is growing immensely all over the globe, where people trade in Bitcoins and Ethereum (these are types of Cryptocurrencies that are operated on Blockchain). This platform is beneficial in many conducts as it offers smooth and transparent transactions and trades across the world digitally which involves less leg and paperwork. Here, you ultimately exempt the mediator and close deals directly with the third party.
Prefabricated Homes is the Future
Let us explain to you what are prefabricated homes in the first place – prefabricated houses resemble a 3D jigsaw puzzle, they are manufactured in parts offsite and then assembled onsite on the preferred location. Prefabrication is a construction technique which is fast and cost-effective compared to various other construction methods. Prefabricated homes are designed employing durable materials, offering high performance in concerns with the sustainability.
Facilitated entirely with amenities and luxuries prefabricated homes are a great choice to dwell for shorter terms.
Millennials, Above All the Generations
If your question is, which category of generation is flourishing as new buyers or investors in the real estate sector? The answer would be millennials. The millennials are currently the largest generation on the bar which has the maximum number of first-time home buyers in the real estate industry, calculated to be around 66%.
Millennials are smarter and much knowledgeable in comparison to the baby-boomers and Gen Xers when it comes to the home buying process. With the help of available technologies, IoT and apps millennials examine thoroughly to keep things streamlined before taking any step that might take them down in the pit of loss.
Substantial Increase in Mortgage Rates
A report from Mortgage Bankers Association states that the mortgage rates are currently around 4.9% (that is in the year 2018) and would stay the same in 2019 as well. The above-mentioned studies are based on the 30-year mortgage rates, as the rates would remain the same for a leading half of the year, they might also tend to jump thereby increasing from the current 4.9% to 5.1% as the year ends. According to the real estate market, it is a healthy growth but, as far as the buyer’s market is concerned, it would be an evident downfall.
According to a real estate forecast that was issued for the year 2018 (July) stated, the prices will continue to rise for the year 2019. As the past year experienced a rise of 8.1%, the experts foretold the rise will progress by 6.5% by the time summer arrives for the year 2019.
Sellers Over Buyers
As mentioned above, the increase in mortgage rates and a shortage of inventory recorded in the year 2017-2018 will generate a deficiency in the housing markets. All of the above will create an irregularity in trade, supply, and inversion of investing in real estate. Hence, the prices of properties will rise in 2019 affecting the affordability of buying homes.
In contrary, it is also a golden opportunity for those who are looking for an investment as there are many properties listed on the bar, you get hands on your dream property, which would eventually make you a smart buyer in the seller’s market. But the final word, 2019 is going to be a seller’s market and a gold mine for the ones who are listing their property.
Decide For Yourself
Addressed above were some real estate trends and real estate forecasts in 2019 that we might get to witness. The real estate market is very fragile and has a drift to fluctuate we will advise you to choose your purchases carefully, and not fall in the pothole of errors.
Else, if wish to buy or sell house in NY, you can reach a reliable real estate company like ‘Elite Properties‘ who will be happy to help you and sort your queries for the housing market.
Are you planning to buy a home for the first time? Well, that’s undoubtedly a smart financial move. However, you may have to face certain challenges such as finding the right location or financing your purchase during the initial phase. So, before you take a step ahead in achieving your American dream of homeownership, you should gain some practical knowledge of investing in real estate. It will help you get a bird’s eye view of the current market situation, ensure you won’t end in smoke, and make your abode journey easier.
Considerations Before You Take the Plunge
Here are some basic yet important questions you need to answer before proceeding. They will positively help you navigate in the right direction.
What Kind of Property Will Meet Your Needs?
Buying a home for the first time can be a test of your patience and forbearance. Don’t get us wrong, but finding a home that meets your needs is actually not a cinch. Its better you start the journey by making a list of all the features/amenities you expect in your dream home. Let’s say your goal is to have a spacious home located in the central area of the NY with a small backyard. Then, you can either opt for brownstones or townhouses. If you want a cost-effective property with low maintenance, walk-up housing, which is the most common housing in New York, would serve your purpose. You have to figure out things according to your preferences and standard of living.
Do you qualify for the Mortgage You Expect?
During the home buying process, it’s crucial for you to know how much mortgage you qualify for. You may plan to buy a home with a net worth of $450,000. However, the lender may not provide more than $250,000. Why? The lender will analyze certain factors such as your total income, job security, and outstanding debts prior to assigning you the capital. They’ll directly say a no if your debt-to-income ratio depicts that you’ll not be able to afford the mortgage payments. So, it’s a wise step to calculate your credit before applying for the mortgage loan.
Do You Have a Trusted Source Who’ll Guide You throughout the Process?
As we mentioned earlier, buying a home can be a daunting task. A trusted source can prove to be a boon for a first-time house buyer because no matter how much groundwork you do, there will always be something where you’ll feel the need of seeking professional help. A real estate agent can provide you a number of options that match your expectations and are within your reach in terms of price range. In addition to that, they can also help you get a loan, complete the paperwork legalities, and streamline the process. Therefore, you must contact an experienced real estate agent in NY to make your transition a hassle-free one.
Home Buying Process
Here are the five significant steps that can demystify the entire home buying procedure.
Pick the Right Type of House
Contradictory to common mindset, there are a plethora of affordable real estate properties for sale in NYC. Make sure to do thorough research of such properties, online as well as by paying a personal visit. At first, check out the houses on the internet by exploring the property listing pages of top real estate companies in NY. This way, you’ll get the description of available houses including their high-quality images. Once you’re done, choose the top 10 or top 5 houses of your choice and contact the real estate agent for further details. Sort out the best property and move on to the next step for fulfilling your desire.
Explore Your Secure Financing Options
Assistance programs that offer low down payment and discounted interest rates for first-time buyers are available across different states of NY. Therefore, you must discuss regarding the different types of mortgages with your real estate agent. Investing your time in exploring the secure financial options may seem like a mentally draining process but, it will surely pay off in the long run.
Make an Offer
Many people get confused during the negotiation and end up frustrated. To avoid such situations, talk turkey to the real estate agent and decide a final price that you can offer for the property. Your real estate agency will then proceed and keep your proposal to the seller.
Consider Doing a Home Inspection
Once the seller agrees to your proposal, consider doing a home inspection by personally visiting the house. You can also hire a professional home inspector to save yourself from any kind of pitfalls. If you find something major that needs to be repaired, ask your seller to either do the needful or deduct the price from the final offer.
Close the Deal
You’ll need to sign a ton of legal papers while closing the deal. Carefully read the ‘legal jargon papers’ and if everything falls into place, go ahead and sign the agreement to seal the deal.
Mistakes to Avoid as First-Time Buyer
Buying a home for the first time is indeed very special. Even the slightest mistake while buying a home can result in failure. So verify the following things first and then take a decision.
Looking for Home First and Loan Afterwards
This is the most common mistake that first-time buyers do and regret later. As a first-time home buyer, you need to keep in mind that the property might fall into foreclosure or short sales if you fail to repay the loan within the specified period. So instead of daydreaming about the home, face the practical world by visiting a lender’s office first.
Not Paying Attention during Home Inspection
All that glitters is not gold. Therefore, paying undivided attention during the home inspection is necessary. Make sure you access everything including the drainage system, roofing, plumbing, and electrical wiring.
Don’t fall in the honey trap of fraud sellers who offer you unbelievable deals. The modus operandi of fraudsters is to take advantage of your ignorance. Stay cautious and understand all the clauses while you sign the agreement. The best way to avoid real estate frauds is to seek professional help. It will significantly minimize real estate related risks.
The Bottom Line
In a nutshell, the more informed you are beforehand, the less stressful you’ll feel during the decision-making process. Do follow these tips sincerely and we’re sure you’ll get your dream house in New York soon!