I found this great article on Ezine.com written by Erika D. Napoletano of InvestorLoft. This is for end buyers and investors alike who want to buy in this buyers’ market.
If you’ve been considering buying your first home, buying a new home or looking to add a holding to your existing real estate investment portfolio, short sales and REO properties should definitely be on your list for further examination. Here are five excellent reasons to broaden your horizons and work with your real estate professional to explore both short sales and REO properties:
- Inventory is plentiful – Banks have an excessive amount of REO inventory on the books and quite simply, they want to sell it. This makes the market very buyer-friendly and places you in a position to acquire a property at below-market value.
- Rental Rates vs. Mortgage Payments – The correction in housing prices have brought mortgage payments much more in-line with rental rates in many areas. For the home buyer and real estate investor, this presents a very favorable scenario as cash flow is more likely today and tomorrow. A great time to buy a rental property in the right area.(Be sure to check vacancy rates, crime stats, etc.)
- Time is of the essence – When looking at properties that are short sales, there is a definite time constraint with the seller, imposed by the bank. You and your agent/broker may find that you stand an excellent chance of picking up a property in short sale when it’s close to the bank’s deadline. Have your agent/broker do some legwork and call the lender to get the scoop.
- Specialization – With the increase in short sales and REO properties on the market due to the economy, there are many real estate professionals who specialize in these areas. If you’re going the route of bidding on a short sale or REO property, it’s extremely beneficial to have the assistance of a seasoned professional who has relationships with banks and is familiar with the bidding process. An unfamiliar agent/broker can end up wasting your time in the bidding process if they don’t understand the legwork involved in helping you submit a competitive quote. When you’re buying something as substantial as real estate, this increase in specialization is an added benefit for every buyer.
- Find your niche – Believe it or not, there are many buyer and agents/brokers alike who won’t deal or even look at short sales and REO properties. This means that as an educated buyer working with a savvy professional, you’re narrowing the pool of bidders for your dream home. Do your homework, understand the bidding process and establish your boundaries for a successful bidding process. Teaming with a real estate professional who specializes can only improve your short sale and REO buying experience.
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Tags: buyers, investor, mortgage, payments, sellers, short sale
