Should You Buy a House in a Recessed Housing Market?
Posted by: real estate / Category: BuyingBefore attempting to buy a house in today’s recessed housing market it is important to investigate all available options. Purchasing real estate in a downturned market offers buyers the opportunity to purchase homes at reduced prices and yield a tidy profit when they are ready to sell. ?/p>
Most people turn to realtors when they want to buy a home. Real estate professionals can help buyers locate appropriate properties and ensure legal documents are properly filled out and filed. However, there are other ways to purchase homes. ?/p>
Today, many homeowners are selling houses as lease-to-own properties. This type of real estate transaction is ideal for people who have bad credit or unable to provide a down payment on the house. ?/p>
With rent-to-own properties, buyers reside in the home and pay the seller rent. A portion of the rent is contributed toward the purchase of the home. Buyers are usually required to provide the seller with a down payment. A contract is drafted outlining the terms of the sale and include the agreed upon purchase price. ?/p>
Lease-to-own transactions generally last between two and five years. Once the agreement expires, buyers must obtain financing for the balance due. The buyer should strive to remove any negative marks from their credit report. Rent must be paid on time and in full each month in order to establish a positive record of payment. ?/p>
When entering into rent-to-own agreements, buyers should enlist the help of a real estate attorney to ensure the documents are legally binding and both parties are covered in the event of default. ?/p>
Another popular way to buy a house is through seller carry back mortgages. With this type of real estate agreement the seller acts as a second lender. Most sellers only carry back a percentage of the loan. In some circumstances, sellers will carry 100-percent of the financing if the buyer is able to provide a down payment of 10-percent or more. ?/p>
Seller carry back mortgage loans generally last between three and five years. This allows the buyer time to establish credit or clear up negative credit. By engaging in seller carry back financing, sellers generate positive cash flow on their property and buyers can lock-in the purchase price; creating a win-win for both parties. ?/p>
Probate real estate is a little known option for buying a house. Probate real estate refers to property left to heirs through a decedent’s estate. Probate is the legal process used to validate a person’s Last Will and Testament and establish the estate’s value. ?/p>
Probate is notorious for dragging on for long periods of time. The estate administrator is responsible for all facets of the estate including maintaining real estate holdings. If the decedent had a mortgage on the property, the estate must continue making payments throughout probate. If the estate does not have sufficient funds to pay the mortgage, the administrator can sell the property to pay off the debt. ?/p>
If the decedent owned the property outright, estate executors can elect to sell in order to eliminate responsibilities of maintaining the home. This is a good option when executors reside out of town and unable to oversee the property. ?/p>
Most probate properties are in good condition and require few repairs. Oftentimes, the decedent used the home as their primary residence or vacation home. Occasionally, decedents own rental properties which have tenants residing in the home. This can be quite lucrative for real estate investors because they can purchase the property with tenants in place. ?/p>
Distressed properties are another option for people who want to buy a home. Distressed properties refer to foreclosure homes, bank owned properties and short sale real estate.
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Tags: Foreclosure, Lease, mortgage, mortgage loan, mortgages, Rental Properties