Five Tips For Buying a Home

There is probably no better way to become aware of the condition of a home than to have your home inspected by a licensed inspector. However, there are several considerations on which only you, as the purchaser, can decide. And, as I’ve said in other articles, it’s my belief there are some things you must do yourself: Manage your money.  Raise your children.  And, also… purchase your home!

1.    Location, location, location…

Probably the most important factor is that your new neighborhood is a good fit.  Take some time to drive around the area and make sure you like it. Check out the traffic at rush hour – if the home you like is on a main street, make sure the traffic noise won’t be a problem for you.

Additional location considerations might include: Where are the closest schools?  Having schools nearby can be great if you have young children yourself.  It can be rather annoying with noise or traffic, if you don’t!  Does the lot back to a wash? If you have cats or a small dog, they might be at risk to urban coyotes and other wildlife. Is there an alley? Alleys have both positive and negative features. They provide a buffer between you and the back neighbor, but they also give opportunities for clandestine behavior since they are relatively private.

You might want to check the crime statistics for the area, something you can find by googling “neighborhood crime data” along with the community of your choice.  You may also go to the county sex offender registry and make sure you are comfortable with your neighbors. In the Phoenix area, this information is on the Sheriff’s web site at

Check into nearby vacant lots. You never know when the lot your kids play on will be developed into something you might not want to have as a neighbor. You can find out who owns lots through the tax assessor web site; for Maricopa County it is

You can find your assessor using Google or your favorite search engine. Usually there is a way to search by map, and you might enter the address of the property you are interested in purchasing, then use the map to see what zoning and who the owners are of vacant lots. Generally your Realtor will do these things for you, if you ask.

You can even ask your Realtor to speak with your potential new neighbors.  Find out if there is any unreported crime; ask if there is a rock band that practices all afternoon. Find out if there is a problem neighbor at whose address the police have a reserved parking spot. Ask the immediate neighbors if they plan any major remodeling or additions. This could lead to a year of construction vehicles and noise from sunrise to sunset. A few minutes of due diligence can prevent an unhappy ownership situation.

Make sure the lot has good features; i.e. not located in a flood area, and not the lowest lot in the area (sure to be 3 inches deep in water every time it rains). Generally this is not a big issue because most municipalities will not give a building permit for such areas.
2.    What do I really need…?

The home you pick should meet whatever needs you or your family have. Think about the future. Having kids? Already have kids? Kids leaving? Getting married? How big a home do you need, how many bedrooms and bathrooms? For later resale, the most popular single family home is a 3 bedroom 2 bath home. Homes with only 1 bathroom or only 2 bedrooms are more difficult to sell than the more standard 3/2.

Take the family and spend a little time in the home. Spend a couple hours, especially during the morning or afternoon rush hour. Make sure the noise and activity levels are acceptable, and make sure the home has all the conveniences you like.

When I purchased my latest home, I replaced all the built-in appliances; they were more than 10 years old. I also like a gas stove, and our property has no gas, so I had a gas stove installed with a small propane tank outside. A 3 gallon tank lasts a year. This total expense was around $5,000 including having the line and tank professionally installed for the propane. The convenience of new appliances and a gas stove makes a huge difference in the utility and resale value of the home, at a modest cost.

Is a pool important? Somewhere to relax on those hot summer weekends? Be sure to inspect the pool closely, using a professional inspector. Pool maintenance can be quite expensive and time consuming. I personally do not have a pool service, instead I have an automatic chlorinator and an automatic pool sweeper. These items are a significant up front expense, but can yield years of virtually maintenance free pool enjoyment. Insist that all pool equipment be in excellent working condition.

3.    Last year’s remodel… this year’s nightmare?

Many older homes may have been converted from a one bath to a two-bath home. You can usually tell.  Make a careful inspection and see if this was done.

Sometimes a master bath has been divided and made into two bathrooms. If the remodel was done well and permitted (a permit was obtained from the municipality), this is a better situation than a poorly done, unpermitted change. You can often find permit information at the city planning office.

Sometimes additional square footage has been added to a home, either by converting the garage into a bedroom or office, or by enclosing the patio. Telltale signs of this might be: No garage, or a garage door that is still there but has no purpose; a slanting floor (garage floors and patios often slant to provide drainage); unusually low ceilings in one room; no air conditioning vents in the room; an outdoor carriage light on the wall of the room; a room with one cinderblock wall and 3 wood frame walls.

Some homes built with a carport have had the carport enclosed. This is an inexpensive and useful remodel, provided it was done correctly and with the proper permits. Things to check for: A window from the house into the garage; garage door is not self closing and/or is not  a solid core door; one garage wall is block, the other walls frame; no power outlets on the garage walls except on the back wall.

Look at the flooring in the home. Flooring is an upgrade many homeowners attempt on their own, but without sufficient skills. Often before selling, owners will rip out old carpeting and install laminate wood flooring. Look for the seams in the laminate; one of the more difficult things for the unskilled installer is to plan the job appropriately so that the seams in the flooring come out right, with no gaps. Further, many installations run right up to the baseboard – sometimes there are two baseboards, the old original and then the new baseboard to cover the gaps from the flooring!

The proper installation is generally to remove the old baseboards so that the flooring is seamless from wall to wall and only a single baseboard is installed. New baseboards should be installed – this minor step costs little and makes a big difference. You can often see a discoloration at the bottom of the old baseboard where the carpet used to be. And, most do-it-yourselfers are not good at mitering the corners and fitting the baseboards perfectly. Just look at the joints and the corners – you will be able to tell, easily, whether the installation was done well.

Tile is another homeowner do-it-yourself favorite, and again, without the proper skills, the job can look terrible close up. Uneven levels in the tiles, grout lines that are not straight, and poorly done corners are just a few examples. Just look at the work, you will be able to tell whether it was done professionally or not.

Finally, look for additions. This is often evidenced by one part of the home leaning away from another part – look at where outside walls meet. Look at joints in the outside walls and see if they are pulling away from each other. Look at the flooring in the home at the same point; if there is carpeting, it is harder to tell, but sometimes the addition will have a different slope from the main part of the house.

For information about remodel work, trust your home inspector. This sort of thing is often more cosmetic, but might make a big difference upon resale.

4.    Who built the ark?  OR….

How is the home constructed? Some older homes are slump block (in the Phoenix area), and this is a wonderful thing, as the utility bills will be substantially less than for a frame house. These homes stay warmer in the winter and cooler in the summer.

While my personal favorite construction is slump block, a close second would be block homes. With these homes, you may find the cable TV companies complain when they have to drill through the block to add an outlet! Block or brick, or some form of masonry, can provide a strong, stable framework that has inherently good insulating qualities.

For some time, homes were literally built by framing the home, wrapping it with insulation and chicken wire, and then using a gunite machine to spray stucco on the outside. I know I am not characterizing this very well, but it is probably the bargain basement construction method. Unless this process is completed carefully, the stucco can develop cracks. Newer homes are built with framing, then engineered wood (plywood or particle board), then insulation and stucco. This is much more stable than chicken wire over framing!

Any of these construction methods, done properly, are acceptable. My opinion is that the risk of problems is lower with masonry of some sort, although most homes in the Phoenix are frame/wood construction.

When I bought my most recent home, I did not check any of the electrical outlets. The inspector verified that they worked, but the brand used by the contractor must have been the very cheapest, because none of them will hold onto a plug – the spring action is so weak that the plug literally falls out of the outlets. I spent a day changing almost every outlet in the house.

Similarly, look at the valves under the sink and toilet. Make sure the lines are copper and not galvanized. Galvanized pipe, installed in the 70’s, will almost surely be rusty and possibly leaking now, 35-40 years later. Insist on a repipe to copper at the seller’s expense. Have your inspector make sure the plumbing is copper.

I like to make sure the inspector checks the shut off valves under the sinks and toilets, because in older homes, they are often frozen and impossible to use. If there is any evidence of leaking, have the seller replace them with new, preferably 90 degree cut off valves, which are less prone to freezing. When you have to have your sink or toilet worked on, you won’t have to shut off water to the entire house for half a day.

5.    Rules, rules and more rules…

Your Realtor should make sure you get a copy of any Covenants, Conditions and Restrictions commonly known as CC&Rs  These are rules associated with a property which are part of the deed and run with the land.  You should also request a copy of the HomeOwner’s Association  or HOA rules which govern your property. Some HOAs restrict the color and type of plants you have in pots on your patio. Some only care that your driveway be free of grease stains. Regardless, make sure you understand every rule. Is renting allowed? Are pets allowed? Can you park on the street in front of your home? Can you keep a boat in the back yard? Are evaporative coolers permitted?  All these things and more can be regulated by the HOA or by the CC&Rs.

HOA information is provided either by the homeowner (in smaller communities) or by the association (in larger communities). CCR information is recorded, at the public recorder’s office, and should be made available to you either by your Realtor or by the title/escrow company.

Either way, your Realtor should make sure you understand exactly what they say, what your obligations are for living in the property. These are just 5 quick tips of many, many more things that might be important to you when you buy a home. Other things to think about (this list is by no means complete):

–    Cost of homeowner’s insurance

–    Taxes

–    Utility costs

–    Garbage pickup / bulk pickup

–    Neighborhood watch

–    Internet service

–    Cable TV

–    Street condition, paving

–    Security system

–    Paint condition

–    Driveway condition

–    Roof condition

–    Age of air conditioners

–    Septic or sewer?

–    Age of faucets and other fixtures and their condition

–    Type of electrical wiring (aluminum, copper?), electrical panel, breakers

–    Condition of shower enclosure and tub area (mold?)

–    Insurance claims history

–    Street utility manhole in front of house?

–    Distance to fire hydrant?

–    Water pressure?

–    Condition of watering system for grass, shrubs?

Finding the perfect home for you and your family should be an enjoyable experience.  I hope these guidelines will help you in your search and home buying experience!

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Picking the Most Appropriate Foreclosure Homes for Sale

Many have jumped into the bandwagon of foreclosure homes for sale. This is because the opportunities are really good and the chance to spot a good property is abundant. There are several types of foreclosures in the market today. Each kind possess their own charm that can appeal to different types of buyers.

Here are some of the more popular forms of foreclosures:


Pre-foreclosure homes for sale are offered either by the financing company holding the unpaid mortgage or the home owner themselves. At this point the home has not yet been foreclosed upon. Usually the home owners decide to sell the property off to prevent foreclosure and save their credit reputation. Buyers of foreclosure homes for sale in this manner may be able to conduct a thorough inspection of the home before committing to purchase. There may also be a wider berth for negotiations as the owner is fighting against a deadline.

Auction Sales

Right after a property has been foreclosed on it usually goes to the auction block and offered to the public. As any auction goes, bidders attempt to best each other in a bidding process. Auctions are cash sales so buyers planning to purchase a home in this manner should be prepared to pay for the entire amount of the property in a very short time. Homes sold at auctions may fetch the lowest price but buyers do not have the luxury of inspecting the home.

REO Homes

Homes that do not sell at auctions revert to the holder of the mortgage and become real estate owned homes. A lot of people find this manner of buying foreclosure homes for sale to their liking. It is probably because of the feeling of security that comes from dealing with a bank or an established financial institution. The price of the home may not be as low as a pre-foreclosure or an auction home but banks do offer perks to stimulate purchase. Once the home becomes a real estate owned the mortgage is extinguished and it comes to the market just like a brand new property. Banks likewise offer title insurance and pest certification in the package.

Joseph B. Smith has been educating buyers on the finer points of foreclosure homes for sale at for over ten years. Contact Joseph B. Smith through if you need help finding information about foreclosure homes for sale.

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Selling Your Home – Top Tips on How to Increase the Value of Your Home

If you are contemplating on selling your home, for sure one of the fundamental tasks that you want to accomplish includes increasing the value of your home. In no doubt, selling a home is a very demanding chore. What makes it even more taxing is the fact that you want to gain the best income and this means you have to carry out the best and the most effective tasks that would contribute for its increase in home value. The economic recession has made selling real estate properties a very difficult activity considering the noticeable gaps that most real estate markets are going through as of the moment. However, the good news is that there are hints and useful tips that you can use as guide to help you sell your home at the price that you want.

When selling your home at the price that you desire, it is important that you dig into some tips that are all directed to improving the condition and the appearance of your home. Think of it as if you are working on a home improvement plan that you have to carry out in order to get a good score when the home appraiser comes and inspects your house.

Before you start with your plans, it would be helpful if you spend some time going over information like the present home value trends. You have to do this in order for you to have an idea on how much is the ideal price that you would need to set for your property. One effective way to give you an idea is by means of consulting a real estate agent licensed in your place. This person will have a more profound idea about your home’s current value. When this is done, you can now move on to your home improvement plan so as to increase the value of your home.

Start by going around inside and outside your home. Look for areas that need repairs like roofs, wooden fixtures, ceiling, windows, doors and knobs. If you noticed that the paint shows noticeable peeling resulting to a very dull appearance of the house, most probably your house needs repainting. However, repainting your house should only be performed after the much-needed repairs have been completed. Repainting would greatly enhance the visual appearance of your residence.

Make sure that your home is an organized place. Everything should have their own place and no clutter should be seen in order to create a very impressive image in the eye of the appraiser and the home buyer.

The kitchen is one of the most important part of the house. This is often one of the first areas that is checked and inspected by home buyers. To keep up with your goal, it is important that kitchen cabinets are in their best shape and floors are safe and well maintained, Also, you have to be sure that all faucets are working and not leaking. Making over your kitchen is one of the best home improvement ideas that can boost up the value of your home especially if you want to sell it fast and easy.

There are still many tips that you can follow if you are really interested in setting the price you want when selling your home. To put it briefly, the better improvements you make in your home, the greater chances you will earn more when selling your home.

Tono has been writing articles for nearly 4 years. His newest interest is about bedroom furniture. So come visit his website that discusses toddler bunk beds [] and bunkbeds with slide [] and information that would help people find the best bedroom furniture.


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Building Personal Wealth With Bank Owned Properties

Bank owned properties are also known as real estate owned homes. They are sold as is but at greatly discounted rates. Most banks have an inventory of foreclosed homes that they consider non-performing assets. The pressure is high on them to sell these homes as fast as possible as they bear down on the resources of the bank.

Qualities of Bank Foreclosures

Distressed homes become bank owned properties when they do not sell at auctions. The banks then appoint real estate agents or brokers to sell these properties for them. They also list the homes in various foreclosure listings. Banks go the extra length to ensure that these homes get sold. Once a home becomes real estate owned, the mortgage is extinguished but is priced closer to the value of the outstanding loan than the real market value. The homes offer great savings potential for buyers.

Prospective buyers of bank foreclosures should be able to inspect the property prior to signing the deed of sale. In fact buyers can stipulate a clause on the sale contract that will allow them to pull out of the agreement pending the result of the home inspection to be carried out by a professional inspector.

Bank owned properties sold to the market always come with title insurance unlike other types of foreclosures where would be buyers still need to conduct a title search to reveal the status of the property in terms of back taxes, liens and other holds.

There will typically be a minimum pest certification that comes with the home and the bank will likewise handle the eviction of former occupants so that the new owners can move in without much problems.

To purchase bank foreclosed homes, you need to make an offer through the bank-appointed agent or broker. The bank can make a counter-offer which you may either accept or do a counter-offer for. You may also negotiate for other aspects of the contract like the mortgage terms and the rate of interest.

Joseph B. Smith has been educating buyers on the finer points of bank owned properties at for over five years. Contact Joseph B. Smith through if you need help finding information about bank owned properties.


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Home Buying Tips – Making the Offer

By now, everyone knows the real estate market is down. However, this is a perfect time for buyers to make their purchase. Interest rates, and home prices are at their lowest level in years. Therefore, any aspiring home buyer can make their dreams come true as they’re able to buy a quality home, at an affordable price before the market starts its move back up.

Every time you buy a house, there are several things that should be done. One of which is very important, and that is to familiarize yourself in making the offer. This is something your REALTOR® should cover with you.

When you buy a home, you’re expressing your intention to buy through what is called an offer to purchase. Each offer is unique but it should contain attractive statements that could make the home seller want to say yes. With so many home sellers in the market your offer should be within your means, and with conditions favorable to the buyer.

To help you out, here are some tips in making an offer:

– The most important element of making an offer is setting the right price. Work with your real estate agent to create an offer that fits easily within your budget, but not to the extent of making it a lowball offer.

– When in doubt, seek the help of your real estate agent since they have more experience in making purchase offers. An experienced REALTOR® will have the technical know how in making one. At this point, if you do not have a real estate agent working for you, it’s time to get one.

One must be sure to obtain both a knowledgeable and skillful real estate agent. Hiring the right person will not only help you make the right offer but also get you the right guidance throughout the complete buying process.

– Mention contingencies. There are times when you might want to back out on the purchase. An example would be your mortgage lender denying you the loan. Therefore, it is important that you mention what you want to happen with your down payment, and the possibility of your withdrawal to legalize any issues.

You should also include inspection contingencies. Although the seller is bound to disclose any known problems of the house, there is still a need for you to have the house inspected. Not all defects may be declared. And take note, some defects can be very costly. Therefore, if the repairs are too much for you or the seller to bear, having the contingency will release you from the contract.

– Research the property. There are things that you should consider before making your offer. Start off with the number of days on the market which your real estate agent can provide. The longer the property has been for sale, the more likely the sellers are in wanting to sell. This will help give you more negotiating power, and puts you in a better position. It’s also not a bad idea to have your REALTOR® research the liens on the property; particularly the amount owed to the lender.

– If the home seller declines the offer, don’t worry. You can always submit a counteroffer. If there is no meeting of the minds, prepare to walk away. There are many other homes on the market that are waiting to be sold.

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REO Homes – Buying Bank Owned Properties – Real Estate Basics

Are you interested in buying bank owned REO properties? I’ve laid out a very basic description of what an REO is, considerations before buying one and the general process to purchase one.

REO stands for ‘Real Estate Owned’ and is bank owned real estate. This can be a great opportunity for an investor. These properties have already gone through the foreclosure process. The bank has tried to sell the property at a public auction but was unsuccessful. Now the mortgage no longer exists and the bank has to take the property back.

Fortunately, you won’t have to go through the mortgage company now; you’ll deal directly with the bank. Any liens against the property will be taken care of by the bank and they are no longer a concern for the prospective investor.

Buying REO properties gives the buyer great leverage since they are often highly discounted and have the potential of bringing in a nice return if rehabbed and sold quickly. But you do want to be careful how you go about buying an REO. There may be a good reason why the property was not able to be sold at public auction. It’s your responsibility to make sure that this is still a good deal.

Banks want to sell these properties because they are not set up as property management companies. And often times they are penalized by the government for holding REO properties. They are losing a lot of money and will sell the properties very cheap if necessary. Often times up to 30% discounted or more.

The ball is in your court to make sure that the price of the property is truly worth paying. Compare the property with other similar properties in the neighborhood. This is called checking the comps. A real estate agent might be able to help you in this process. You would look for several properties in the neighbor hood with a similar age, construction and layout. You would want to see the average sale of similar houses to be much higher than what you are looking to pay for your REO property.

Be sure there is enough equity in the home. After doing repairs will there be about 30% equity in the property? At this point you don’t want this to be an average priced property. You are looking for a deep discount.

Look for major repairs that might make it a poor investment. The bank is most likely selling their REO’s “as is.” That means that if there are major repairs on the property, you will be responsible to fix them. That is why you should be sure to inspect the home. If you do not have experience in this area it is advisable that you hire a professional to check out the home with you.

The bank will most likely see you as more serious if you request an opportunity to do such an inspection. If you do find something wrong, don’t expect the bank to repair it. Of course, it couldn’t hurt to ask since they are trying to get rid of the property. Regardless, REO homes almost always need repair. Even if you do not find something major, there will be minor repairs such as carpeting, paint and perhaps windows to replace. If you are looking to fix it up and sell it be sure to understand the costs involves for repairs. Be sure to factor those costs into the purchase price.

Also consider the time it will take to do the renovations. There are monthly costs you will have to incur while you are renovating the property. These are called holding costs. Be sure that your property is in an area that it will sell. If not you might want to consider rent options. Location is important!

When considering purchasing an REO it is helpful to understand that banks want to get the best price they can get for the home. They also have to consider costs they must bear each month they hold onto the property. There is usually a bank REO department that will deal specifically with these properties.

You will make an offer to the bank. The bank will most likely make a counter offer. Their offer will most likely be higher than you expect. They must demonstrate to their company that they attempted to get the best price. At that point you will make a counter offer to the bank. When you get to that point expect the bank to take a while to respond to your offer since there is likely to be several levels of approval the offer must go through.

Offers are usually faxed back and forth between parties. And as much as you might be excited and anxious to get a reply be aware that bank hours do not include evenings or weekends.

Be sure to include contingencies in your offer so that you will have a time period to thoroughly go through the property and reject the offer if something major is discovered.

The REO sales process can be both exciting and frustrating. Be patient and do your due diligence. Solid REO sales are good for both you and the bank. They are getting debt off of their hands, and if you know what you are doing, you will be getting a great investment deal.

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Buying a Home – Home Warranty Secrets They Don’t Want You to Know

As you near the end of your home buying transaction, one of the last priorities is the option of selecting a home warranty. These type of warranties are set up to fix and substitute covered broken or worn items with new ones. If you think your next property could be headed for some maintenance issues, make sure you apply for one prior to the closing of escrow.

Your home warranty will spell out which mechanical systems and built-in appliances will be covered. Most policies are written to repair and replace items such as plumbing, heater, and electrical components. If you’re willing to invest more money, you can purchase additional coverage for items such as the air conditioner, whirlpool jacuzzi, pool, and roof. If a situation occurs where you have a breakdown with any of these items you can pick up the phone and contact your warranty company to determine what the problem is. If the warranty company agrees with you that the repair is part of your benefits you’ll need to contribute a predetermined amount of money to cover parts and labor which can cost you between 60 to 100 dollars.

If you decide to check into the customer complaint history of most home warranty companies, you’ll be disappointed to learn most companies have piles of complaints filed against them. Many homeowners are angry when they uncover the hidden pre-existing condition clause which prevents coverage on pre-existing issues. If you were checking out the warranty policy that has this pre-existing condition clause make sure you understand your policy will not cover you for any new problems.

You’ll also find most home warranty policies have extra exclusions which include repairs as a result from poor maintenance or servicing, faulty installations, and areas the inspector could not access. Some policies even refuse to cover the repair until you invest additional funds to upgrade the system to modern day building codes. Make sure you understand that most warranty policies won’t cover repairs if they’re not caused by everyday wear and tear.

If you shop around, you’ll discover most warranty policies are priced somewhere between $300 to $1000 per year depending on the home size and type of benefits you choose. As you search for your new home, you’ll find most sellers willing to include the first year of coverage as a gift for buying their home. Even your agent may even be willing to pay for the first year so that you’ll be satisfied with their service.

But if you have to cover the full cost of the home warranty policy, you’re probably smarter if you invest money each month towards an annual repair fund to cover unplanned repair problems. You should aim for a goal of $5000 each year to cover future repairs.

However not all warranty policy holders are unhappy with their policies. If you look hard enough, you can find a caring and helpful technician who gets the warranty business to cover the repair. Make sure you thoroughly checked out each warranty policy and understand all exclusions.

If you live in a state that contains a government agency which supervises home warranty companies, inspect the prospective company’s complaint history before you sign up with them.

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Save Money Buying a Foreclosure Property

Buying foreclosure property can yield substantial savings, as long as buyers understand how to capitalize on available options. Most people are familiar with buying houses through foreclosure auction, but this is not always the best approach.

Foreclosure property sold at public auctions often has two or more mortgage loans attached. Real estate auction prices are established based on the balance owed on the first mortgage. Buyers are responsible for conducting due diligence to determine if additional mortgages, tax liens, or creditor judgments are attached. If so, buyers must engage in negotiations to pay off outstanding balances in order to take possession of the property.

Another drawback of buying foreclosure property through auctions is buyers are usually required to provide funds within 24 hours of submitting the winning bid. This may not be a problem for investors who buy homes with cash, but can be challenging for first time home buyers or those purchasing foreclosure property as a second home.

Most people who buy houses at auction obtain preapproved financing through their mortgage lender. Others take out a home equity loan using their primary residence as collateral to secure the loan. This strategy can place buyers’ primary residence at risk for foreclosure.

Instead of attending foreclosure auctions, many people are now looking at buying bank owned real estate. These properties encompass foreclosure realty that did not sell through auction. When banks retain ownership they sometimes make repairs to return the home to livable condition or make it more marketable. However, properties are sold in as-is condition and any work performed is not covered under home warranty.

One of the biggest advantages of buying bank owned vs. foreclosure properties is real estate owned by banks are sold with a clean title. Not only does this save buyers money, it also allows them to take quick possession of the property.

Bank owned real estate is usually priced higher than homes sold through auction, but all the time-consuming and costly details are taken care of. Many states include a redemption period for properties sold through auctions. If foreclosed property owners are capable of paying off the outstanding loan balance they have the option to buy the house back from the winning bidder. The possibility for owners to reclaim their property is eliminated when buying houses through banks.

The downside of buying bank owned foreclosures is mortgage lenders rarely reduce the purchase price. Buyers often compete with multiple buyers and should be prepared to submit their highest offer. The exception to obtaining reduced prices through banks is if substantial repairs are noted in the home inspection that was not recorded when the real estate was initially repossessed.

One option to buying foreclosure property though banks is Fannie Mae’s Home Path Mortgage program. In addition to offering discounted real estate, Home Path provides special financing options for buyers with bad credit, along with a low down payment requirement of 3-percent.

Many real estate investors are turning to Fannie Mae foreclosures because these properties often qualify for grants under HUDs Neighborhood Stabilization Program. Individual buyers and investors can apply for NSP grants when purchasing real estate in areas that have high foreclosure rates.

Combining NSP grants with Home Path’s low-interest and low down payment loans allows buyers to purchase real estate at substantial savings. Details about Fannie Mae’s Home Path Mortgage program are available at

Buying foreclosure property is not without risk. Anyone planning to buy foreclosed homes as a primary residence or investment property should become familiar with the pros and cons of buying distressed real estate.

The primary goal is to buy houses well below market value, make necessary repairs, and either obtain instant home equity or quickly sell the property for profit. Buyers must conduct due diligence to ensure the home is actually a good deal and not a money pit.

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All About Bank Owned REO Foreclosures

All is not lost if you’ve missed the pre-foreclosure and the auction period. You can still get a property at a discount through a Bank Owned or REO Foreclosure. When a property receives no bids at all or if nobody is willing to pay even the opening bid, the foreclosing lender bids for it and takes the property back. The Bank then passes on the property to its REO (Real Estate Owned) department which makes arrangements to sell the property.

Getting a property once it becomes bank owned is pretty simple and clear-cut. It is similar to shopping for a property that has never reached foreclosure proceedings. Let’s look at the advantages and disadvantages of purchasing a Bank Owned/REO property.


· You can take time to make a decision since there’s no mandatory time limit fixed like it is in an auction.

· You get the opportunity to take a good look at the property to get an idea of the condition that it is in and the repairs and maintenance that has to be done.

· There is no inconvenience or awkwardness because the bank makes the arrangements to evict the former owners.

· You don’t have to bother about any other liens on the property because they are taken care of by the bank itself.


· An REO property will be more expensive than one acquired during pre-foreclosure. Though the property is unsold, it is still unlikely that the bank will get rid of it at rock bottom prices. Sometimes the price fixed by the bank is more than the market value of the property.

· Most of the time the bank wants to dispose off the property in an as-is condition. To prevent yourself from getting any nasty surprises put in an ‘inspection contingency’ condition. This will let you inspect the property and pull back your offer if the property is not up to the mark.

· Banks are not required by mandate to supply a Property Condition Disclosure Statement. However, if a real estate agent is involved, he is compelled to provide a Property Condition Disclosure Statement.

To purchase a Bank Owned/REO property you have to make an offer to the bank. Even though the auction was unsuccessful the bank will still try to get the best price they can. Once you make your offer, the bank will make a counter offer generally one that is higher than your offer. Settle on your maximum price and make a final offer. Thereafter it will be put forth for approval after which a decision will be taken.

Many people still question the wisdom of purchasing an REO or bank owned property. The price is not as low as it is during pre-foreclosure. Moreover, the repairs and other renovations required may send your budget flying through the roof. However, this doesn’t mean that you can’t get a discount on REO properties. Keep your eyes and ears open and negotiate the best bargain you can keeping your financial circumstances and the worth of the property in mind.

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Home Buying Tips – The Secrets on Negotiating Like a Pro

As soon as you found the house that you have spotted the house that you want, you wish to make an offer as soon as possible. Talking to the seller and negotiating for the price that you want can really be a challenging thing to do. Usually, the first amount that you have is not what you would want to pay for that house. As much as possible, you want to lower it down to how much you can actually afford.

The seller would normally have the opposite objective that you have which is to have a higher asking price. He wants to fully maximize the market value for his property. Thus, the best thing you can do is to give him an offer the both of you can agree.

If you are caught in this scenario, you might have only few ideas or even do not know anything at all, on how to negotiate with the seller like the pros do. So, the best thing you can do is to read the remaining paragraphs below for some helpful tips.

Initially, doing a research can help you with this endeavour. You need to have an overview on the kind of community that it have? The type of neighbouring houses on such place and other factors which can affect the market value of the property you are eyeing for. In this way, you can have enough comparison with others and can be able to demand for a reasonable price.

Get to know the reason behind why the seller is disposing the house. Sometimes when a seller would leave the house due to promotion or anything that will involve his career, this would mean he needs to sell the house urgent. Thus, he can grab any price that he has, especially if there is nobody interested with his house.

When you are talking to the seller, do not show him that you are too naive about the negotiation that is going on. Sometimes ignorance can be the cause why sellers take advantage those first time home buyers. They know that these people do not have any idea at all about negotiating for the price and thus they take advantage of it. Make sure that you know every bit if the discussion so he would also be fair and right in stating his selling price.

Do not hesitate in asking questions to the seller. This will help you learn more about the property and dig deeper to the relevant details which can affect to the market value of the house. Sometimes, sellers are too wise and they do not divulge those concerns which are relevant to the price. They would keep anything and everything to the buyer for the very reason that they do not want the buyers to be discouraged about the flaws of the house.

Lastly, do not show to the seller that you are very interested and eager to own his house. He might take advantage of this and thus he knows that whatever it takes, you would definitely buy the house. Be composed and control your urge. Do not be impatient when closing a deal. Besides if the house is really for you, it will surely end up in your hands no matter what.

Buying a house can be a challenging endeavour to partake. If you are too naive about it, you will definitely have a hard time closing the deal. Thus, before you engage into any transaction, make sure that you do a research and educate yourself about it.

Take a look at these sites Scottsdale AZ View Properties for Sale [] and Scottsdale AZ Houses [] for more homes for sale suggestions.

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