Foreclosure homes on the market have skyrocketed on the market and the increase is going up daily. Foreclosure information has increased in many areas as much as 28% to 45%. The latest report from many professionals is the numbers have doubled over the last few years. Real-estate owners are struggling with many issues. Loss of jobs and adjustable rate mortgages that rise in price with just no way of making the payments as they rise. Real estate peak prices of 2006 and 2007 left many with no access to new homes.
With the skyrocketing real-estate prices the mortgage lending industry got very creative with loans to seemingly be helping people get into homes. The real-estate prices were rising so fast that many times bidding wars would take place forcing real-estate to higher prices.
This all seemed to be an endless cycle with the large numbers of buyers jumping on the low interest rates financing 100% of properties. Most buyers could not afford the high prices. But with the low interest rates and creative adjustable rate mortgages allowed millions of people to move into new homes. This caused the biggest real-estate boom in history and lead to the biggest crash in history.
In many areas of the country most all of those mortgages from homes sold during the boom are interest only mortgages. Millions of home owners are stuck in homes that are down in value anywhere from 35% to 50% less than their purchase price making interest payment that are increasing because of the ARMs. When you add this to the biggest downturn of the economy in history it all spells disaster.
To help you understand let’s put the scenario in perspective. A prospective home buyer acquires a 300,000 dollar home with 80% financing that under normal circumstances he could not afford. But with a 3 year ARM at 5% payments of 1250 a month seamed affordable. This stretched most to the limit but like most they believed they could afford it.
What happened to most is that ARM reached the adjustment period and jumped to 8%. Now Mr. Home owner was looking at monthly payments of 2000 dollars plus. With the downturn of the economy and the job market drying up being able to pay for the home was just no longer possible.
Some are able to refinance to escape foreclosure. Many find that under the standards of today we can no longer qualify for as much credit as earlier before the downturn in the economy. The people that have built up lots of equity have better luck with newer more affordable mortgages. Still many others used their equity via seemingly affordable lines of credit that served to compound the problem.
So just what does all this disaster in the real-estate markets mean? It all spells “Opportunity” for today’s buyers. Today’s real-estate market is a buyer’s market! The only thing is that it is not easy to do. The opportunity is huge but it will take a lot more work to accomplish.
Buying real-estate on the foreclosure market today can net savings of 10 to 50% if you know how to navigate the shark infested waters. Many are attracted to what seems like a “get rich quick scheme” but my friend it is far from that. But there is lots of money to be made! One thing for sure is, it will require lots of persistence and more patience than anyone has. The research will be endless and the preparation monumental.
To be successful will require your full-time attention of 40 plus hours a week at first. The first place to get started is to learn about the many stages of the foreclosure process. There are stages of the process that are easier to profit in than others. You pick one area to specialize in like the (notice-of-default) or NOD. This is the first stage of the process and as a real-estate investor one of the easiest points of the process to profit.
Why? There is time before the property is actually foreclosed which may assist you in getting the best possible purchase price and saving the owner from foreclosure.
In the next stage of the process that becomes much more serious is called (notice-of-trustee-sale) or NTS. Some real-estate investors really enjoy this stage more than others. Because this is where lenders sell the properties at public auctions but it also means competition. For those that love auctions this will be the perfect area to work in.
It does mean you will have to be prepared and will need to have done all your homework and research before the auction. It is important that you know the margins when biding to make a profit. Although the time varies from state to state the auction will occur anywhere from 90 to 120 days from the NOD so you must be prepared in advance.
How to buy foreclosure homes and foreclosure information today is readily available and as close as your home computer. Lists of foreclosure homes in your area are available. There is lots of good books available on the Internet that provides the step by step guides to follow buying foreclosure properties using the most profitable methods.
