(Home equity loans) Great Deals From Pre Foreclosures

August 28th, 2008 admin Posted in realestate |

By Prudence Wong

Many valuable real estate investors consider that the buying pre foreclosures as the best opportunity for real estate investments. Recently I made an agreement for a pre foreclosure buying. Believe me I got it at fewer prices, about 45 % less than the market value. In fact there are many opportunities where you can earn more.

Pre foreclosure properties are those reached the final stages of foreclosures before it is taken back or repossessed by the bank or lender. The property will under the control of the owner still, and if he clears his debt with the bank, he can enjoy the full claim of the property. Mostly the owner will make the payments due to the bank and take back it.

As all of us know, there are many investment avenues in the real estate field. Buying pre foreclosures is one of the best avenues for real estate investments. In fact the pre foreclosure properties have great demand among the investors due to its great benefits. If you are not familiar with pre foreclosures and also the advantages with them, you may not consider this as a great opportunity and may miss some great options

The first and best advantage of the investment in pre foreclosures is the reduced selling price of the property. In this case, the owner would be in a hapless situation and his only aim will be to get rid of the property and pay back to banks to avoid foreclosures. In fact at this juncture the owner will not be having any other option but to sell it. So this is the ideal time to have a great deal for the pre foreclosure property.

Many investors gained through such deals. In fact there are many specific examples and I am one among them. If you come across such a property, you can get it at a 50% less market value. This is the ideal time to save much money in your wallet and get a great property, which will be appreciated in multiples later.

A second advantage you get is the absence of a third party in dealings. You can have the deal directly with the owner. This is absolutely advantageous to the buyer as you will be in complete control of the selling process. Remember that you can bargain as low as possible making use of the present financial condition of the seller. Mostly he cannot turn down your offer.

Getting the information on pre foreclosures is not a difficult task. You can search for pre foreclosures in newspapers or in Internet. There is no wrong in calling the lender himself and getting the details of potential pre foreclosures. Once if could locate the property for pre foreclosure, you can take necessary steps to make the deal realistic at an affordable price.

As far as the pre foreclosure properties’ availability is concerned, you can see that there is less competition compared to foreclosed properties. If you are looking for a residential property or looking for an investment opportunity, buying pre foreclosure properties will be a great deal.

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The Four Attributes of a Good Owner Builder - Your Construction Loan and Project Depends on Them
By Chris Esposito

Owner builder construction can save you 15% to 35% during the construction of your own home by cutting the costs of hiring a general contractor. However, if you don’t take the planning and construction seriously, then you could end up losing a lot of money and your dream home. Therefore, you need to have these four attributes to be a successful owner builder.

1. An owner builder will need to have strong project management skills. Owner builder construction loans are designed to allow you to act as your own general contractor. That means that you are going to hire your own sub-contractors and oversee their work. Therefore, an owner builder must be able to successfully manage the hiring of multiple sub-contractors as well as manage their labor during construction.

Owner builder construction is simply a long project. And, if you have sound project management skills, then you should be able to manage the construction of your new home. For example, you will need to make sure your sub-contractors show up to work on time, stay through a full day’s worth of work, and actually perform quality work during construction.

Because an owner builder is the general contractor for the construction loan, it will be your job to keep all of the sub-contractors informed about the timeline of the project. For instance, if your foundation is taking longer than anticipated, you will need to let your framing crew know immediately so you can schedule when they need to be on site to start the framing. If an owner builder doesn’t keep the labor strictly scheduled, he will lose precious time and money during construction.

2. A successful owner builder will be good at planning. Most people unfortunately make the mistake of assuming that the most important aspect of owner builder construction is during the actual construction phase. But a smart owner builder knows that the battle is won or lost during the planning phase.

In fact, owner builder construction loans are designed to help you with this part of the process. During the loan and planning stages, an owner builder will take the time to find the right piece of land to go with the right home plans. Then, a budget needs to be compiled based on written bids and quotes from local sub-contractors who have reviewed the blueprints.

If an owner builder fails to take these steps seriously, they will fail during construction. In other words, if you rush through the planning stages, you will have trouble getting your building permits and will lose a lot of time and money in labor and materials during the actual construction.

3. A good owner builder understands the value of follow-up and inspections. If you don’t take the time to inspect the materials that are delivered on site or inspect the labor that your sub-contractors have completed, then your home will be riddled with problems by the time you move in.

This is not to say that an owner builder has to be able to personally inspect the sub-contractors’ labor to ensure it meets specific building codes. That would require years of experience in the building industry, which is not a requirement to be a good owner builder. Instead, you need to take the time to be on site with local county building inspectors.

As each phase of construction is completed, make sure that the county inspectors are doing a thorough inspection to ensure the labor and materials in your home exceed the minimum building code requirements. In fact, you should not pay any of your sub-contractors for their labor until their work has been thoroughly inspected and deemed satisfactory. An owner builder who pays their sub-contractors for labor before satisfactory work is completed will have a very hard time getting those sub-contractors back on site to make any necessary corrections.

4. Owner builder construction requires strong negotiation skills. If you want to save as much money as possible while building your own home, then you will need to be willing to negotiate for lower labor and material costs.

In today’s housing market, an owner builder truly has a great advantage when it comes to negotiating with sub-contractors. A few years ago, sub-contractors were in high demand as everyone was building as many homes as possible. With the current housing market slow down, the construction has also slowed down.

This means that there are a lot of hungry sub-contractors looking for work. This means that a savvy owner builder can negotiate for lower labor and material costs to save as much money as possible. Don’t be shy about it. Remember, the sub-contractors will be working for you - not the other way around.

So, if you want to be a successful owner builder, you will stand a much better chance if you know and fully understand the importance of these four attributes. Notice that not one of these attributes mentions anything about having to be able to swing a hammer or hang drywall. Instead, owner builder construction is won or lost at the planning and management level.

Chris Esposito specializes in owner builder construction loans, helping people act as their own general contractor to build their homes. Visit Owner Builder 101 for more information about owner builder planning and financing. Go to Owner Builder 101, or call (877) 876-3688.

Real Estate Investing And Purchasing Terms You Should Know
By Jerry Glynn

Home buying can be a tricky process. Here are some home buying terms that you will most likely encounter as you purchase your home. Familiarizing yourself with these home buying terms will help you make decisions regarding your purchase.

Amortization is a schedule that outlines your loan payments for the duration of the home buying loan. It details how much of each monthly payment goes toward the principal and how much goes toward the loan. Initially, the bulk of your payments will be applied toward the interest.

Appraisal is generally paid for by the home buyer, the appraisal provides an estimate of the propertys worth. Required by most lenders, it must be performed by a licensed appraiser before your home loan will be approved.

A buyers agent, as opposed to a sellers agent, represents only the interests of the home buyer. For an agent to be considered a buyers agent, an agreement must be made between the buyer and the agent. Without such an agreement, the agent could end up representing the seller in a real estate transaction.

Closing is the final step in the home buying process in which the transfer of the deed is made from the buyer to the seller. The mortgage is also finalized at this point.

Closing Costs are required to be paid at the time of closing. Closing costs are usually between 3 percent and 5 percent of the price of the home and include such fees as loan origination fees, attorney fees, and recording fees. As part of your home buying negotiation, you might get the seller to pay some, or all, of the closing costs.

Earnest money is the process in which buyers can make a deposit on the home to demonstrate the seriousness of the offer. When an earnest money deposit is made, it is held by an escrow until closing. It is then added to the down payment.

Escrow describes the funds held before closing by a third party, usually including the earnest money deposit. Future taxes and homeowners insurance, held by the mortgage company after closing, are also considered escrow.

FSBO or For Sale By Owner is a term refers to property that is being sold without a real estate agent. FSBO is also used to refer to the home owner who is selling the property.

Foreclosure is process after home buying is complete by which a lender repossesses and resells a property after the owner has defaulted. A lien is a legal claim that keeps the property from being sold until the lien is paid off.

A loan origination fee is the fee charged by the lender for processing the loan. The loan origination fee is due at closing. Private mortgage insurance may or may not be required in every situation.

When you make a down payment less than 20 percent of the loan amount, the home buying lender requires you to pay private mortgage insurance. This insurance protects the lender if you default on the loan. Finally, title Insurance protects your title from claims against it.

Keep these terms in mind as you go through the real estate investing purchasing process, and you will be well on your way towards making smart real estate decisions.

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