Buying your first home is often an intimidating process. The date of the last payment on a 30-year mortgage often looks like the setting for a science fiction film instead of the day your house will be paid off. Don’t be intimidated. The current market is the perfect place to buy your first home.
For starters, interest rates are astonishingly low right now. Banks and financial institutions are offering unprecedented mortgage rates. Locking in these low rates for the length of your loan means you’ll be set for savings the entire time you own your home.
Another great way to get a great low price on your first home is to learn more about REO properties. In recent years, a record number of people have defaulted on their home mortgages, partly because banks were lending to people that could not afford the huge mortgages they got. This has resulted in a surplus of bank owned properties, also known as REO properties.
Banks don’t specialize in selling homes. They aren’t real estate agents, and they are frequently just looking to recoup some of their financial loss on the properties they own. What does this mean for a first time home buyer? REO properties are often goldmines. Because banks want the houses off their hands, great deals are just waiting to be had for people interesting in purchasing an REO home.
That’s not to say that the REO market is a cakewalk by any means. Investors and buyers are no strangers to the deals that abound when banks want to sell properties, so it is always best to have a seasoned real estate agent to serve as your guide to ensure you get the best deal possible.
Sometimes, when several people are bidding on a bank owned property for example, other houses are a better value than the one on which you are bidding. If the bids get too high, your real estate agent will point out to you that other houses that are priced to sell, perhaps from being on the market a long time, are a better value for you. In this way, a good real estate agent is the best advocate a first time home buyer can have by their side.
Also, an REO home is not subject to the same rules of disclosure as a normal property. In other words, the seller does not have to tell you if certain repairs need to be made to the house. Sometimes, before a home is foreclosed by the bank, its previous owners damage the property because they are angry about losing their home. A good realtor will warn you about what does and does not have to be disclosed in writing by the seller.
If you or your spouse is handy around the house, minor fix-it jobs are likely not a concern. Not every foreclosed home is damaged, either. Before a first time buyer enters into the world of REO homes, they should have a seasoned expert by their side to help them through the process and find the best home to suit their needs.
In every market from San Diego to Albany, great deals for first time home buyers abound. When you are ready to take the plunge and get your piece of the American dream, call a trusted local agent to start the process in motion. It’s one of the biggest purchases you’ll ever make in your life. When you wake up for the first time in your new home, you’ll realize it was also the best purchase you ever made, too.
Kari Shea is a real estate professional with Shea Real Estate & Investment Groupwww.shea-realestate.com.
[tags]REO,real estate owned properties,first time home buyer,San Diego[/tags]
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