Buying from a Real Estate Auction
http://www.articles-live.com/articles/1777/1/Buying-from-a-Real-Estate-Auction
Joe Cline
The author writes articles on Austin Texas Real Estate Blog. For more information about <a href=http://www.affinityproperties.com/>Austin Real Estate</a>, <a href=http://www.affinityproperties.com/about.php>Austin Texas Realtor</a> and <a href=http://www.joecline.com/>Austin Texas Real Estate</a> can be found on the net.
By Joe Cline
Published on 06/4/2008
Buying real estate is something that many people are just not knowledgeable about. They have never attempted it and have no idea what they need to do. The process can be very easy as long as you have some basic information and just so long as you are willing to follow a simple procedure.
Buying from a Real Estate Auction
Buying real estate is something that many people are just not knowledgeable about. They have never attempted it and have no idea what they need to do. The process can be very easy as long as you have some basic information and just so long as you are willing to follow a simple procedure. As such there are several real estate buying methods to choose from and one is surely to fit into the plans that you have made for homeownership.
The most common way to buy a home is through a realtor. This is where you have a real estate professional working for you to find the home that you want and to negotiate the sale. In most cases the realtor is going to work on a commission basis, in other words, they are not going to get paid unless you buy a home. The realtor is going to be with you every step of the way from finding the home to helping you secure the financing that you need.
The other form of real estate purchasing that many will do is the real estate auction. This is very similar to the idea of the standard auction but instead of possessions the home itself is being sold to the highest bidder. This is often a more complicated method for buying a home and the new home buyer must be very careful when attempting to purchase through the real estate auction to avoid critical mistakes.
Financing
The first thing that you have to be sure that is in place is the financing. You need to get a loan lined up before you even attend the real estate auction. This is a common practice and nearly any mortgage company will know how to handle it. For the most part you will see that the mortgage company will give you a set dollar amount that they are willing to loan to you based on the homes value. You then take that amount and set it as the maximum amount you bid on the auction.
Down Payment
Nearly every real estate auction is going to have similar payment terms that have to be followed. The most common being the down payment. You will need to have a cashiers check in place for a percentage of the final sale price before you can start the process of the final purchase. This is done by giving you a set period of time to pay the down payment. Most of the auction companies require that you make the down payment within two weeks of the auction closing.
Bidding
Bidding is the most dangerous part of the entire process. When you are bidding on the home you have to note that you are bidding against other people. This can cause the price to rise very quickly. You should be very careful to not over bid. It is easy to get caught up in the moment and end up paying much more for the home then you can afford. Your bid is your contract so be careful when you are doing so.
The most common way to buy a home is through a realtor. This is where you have a real estate professional working for you to find the home that you want and to negotiate the sale. In most cases the realtor is going to work on a commission basis, in other words, they are not going to get paid unless you buy a home. The realtor is going to be with you every step of the way from finding the home to helping you secure the financing that you need.
The other form of real estate purchasing that many will do is the real estate auction. This is very similar to the idea of the standard auction but instead of possessions the home itself is being sold to the highest bidder. This is often a more complicated method for buying a home and the new home buyer must be very careful when attempting to purchase through the real estate auction to avoid critical mistakes.
Financing
The first thing that you have to be sure that is in place is the financing. You need to get a loan lined up before you even attend the real estate auction. This is a common practice and nearly any mortgage company will know how to handle it. For the most part you will see that the mortgage company will give you a set dollar amount that they are willing to loan to you based on the homes value. You then take that amount and set it as the maximum amount you bid on the auction.
Down Payment
Nearly every real estate auction is going to have similar payment terms that have to be followed. The most common being the down payment. You will need to have a cashiers check in place for a percentage of the final sale price before you can start the process of the final purchase. This is done by giving you a set period of time to pay the down payment. Most of the auction companies require that you make the down payment within two weeks of the auction closing.
Bidding
Bidding is the most dangerous part of the entire process. When you are bidding on the home you have to note that you are bidding against other people. This can cause the price to rise very quickly. You should be very careful to not over bid. It is easy to get caught up in the moment and end up paying much more for the home then you can afford. Your bid is your contract so be careful when you are doing so.
House Flipping the Right Way
Bringing in money from buying homes and reselling them is an idea that many people have. The main concept here is buying at a low price and then turning around and selling for a higher price. The most commonly used term for this is house flipping. The terminology refers to the flip of the home from buyer to seller and right back to selling again. As such this is hardly a new practice and has been in play for many years.
The idea is simple for most people. They see a home that is for sale, usually under duress from foreclosure or tax issues, that has a low price. The reason why the price is well below market is the desire of the seller to get out from under an expense that they do not need. So the misfortune of others can be the fortune of some. A house flipper will then purchase the home, make some minor adjustments and repairs, and then sell the home to a new buyer at an inflated rate.
The real trick here is to find the properties that you can flip without a problem. There is a danger that you could buy a home and find out that some serious problem exists necessitating expensive repairs and time consuming issues that could cost you all the profit that you would make. So you have to be sure that you are making every effort in properly researching each and every home that you intend to purchase. To make this easier we have provided some valuable advice below to aid in this process.
Inspections
Each and every home that you look to purchase should be inspected by a qualified home inspector or home inspection service. This can get expensive which is the reason why most house flippers will befriend a person in this field and pay them outside of the normal procedures or under the table for the inspections to be performed. This will ensure that you are getting the most information that you can use to determine the price you should pay.
Legal Documents
Most often a person that is involved with house flipping will be buying homes without mortgages attached to them. This is a money saving and time saving effort for the most part. This will mean that you have to get legal documents drawn up for the purchase of every home. Most often you can get a single set and copy them for further use with future transactions. Many states require that such documents bare the signature and seal of a notary as well.
Tax Considerations
Finally you have to be concerned with the taxes on the homes that you buy. Most house flippers do not like to hold onto homes so long that they would have to pay taxes but it can happen. There are times when you have no choice but to hold the home over due to repairs and such so the taxes will come due. Factor this into your pricing when you are looking to buy.
The idea is simple for most people. They see a home that is for sale, usually under duress from foreclosure or tax issues, that has a low price. The reason why the price is well below market is the desire of the seller to get out from under an expense that they do not need. So the misfortune of others can be the fortune of some. A house flipper will then purchase the home, make some minor adjustments and repairs, and then sell the home to a new buyer at an inflated rate.
The real trick here is to find the properties that you can flip without a problem. There is a danger that you could buy a home and find out that some serious problem exists necessitating expensive repairs and time consuming issues that could cost you all the profit that you would make. So you have to be sure that you are making every effort in properly researching each and every home that you intend to purchase. To make this easier we have provided some valuable advice below to aid in this process.
Inspections
Each and every home that you look to purchase should be inspected by a qualified home inspector or home inspection service. This can get expensive which is the reason why most house flippers will befriend a person in this field and pay them outside of the normal procedures or under the table for the inspections to be performed. This will ensure that you are getting the most information that you can use to determine the price you should pay.
Legal Documents
Most often a person that is involved with house flipping will be buying homes without mortgages attached to them. This is a money saving and time saving effort for the most part. This will mean that you have to get legal documents drawn up for the purchase of every home. Most often you can get a single set and copy them for further use with future transactions. Many states require that such documents bare the signature and seal of a notary as well.
Tax Considerations
Finally you have to be concerned with the taxes on the homes that you buy. Most house flippers do not like to hold onto homes so long that they would have to pay taxes but it can happen. There are times when you have no choice but to hold the home over due to repairs and such so the taxes will come due. Factor this into your pricing when you are looking to buy.
Investing in Home Foreclosures
Times can become difficult for a lot of people in this world. You never know when tragedy is going to strike, leaving you unable to meet the financial responsibilities that you have. This is where you start to lose things. Most often the highest expense is the first thing that is let go, which is usually the house payment. When you fail to meet the house payment that you have agreed to your home can go into foreclosure, which means that the mortgage company is moving to take the home back to recoup their losses.
Each year more and more homes go into foreclosure. However, this can be a good and bad thing at the same time. While no one wants to see a person lose their home, the real estate investor stands to make some good deals when investing in homes that have entered the foreclosure process. It is all about timing and how you make the presentation. Most often you are going to be able to buy the home for a fraction of what it is worth.
One thing to understand here is the fact that mortgage companies do not want homes. They want money and they are willing to do just about anything to get it. As such they are not happy about a home going into foreclosure and they are willing to make some serious deals to keep from having to repossess the home. This is where the real estate investor can come in and save the day.
Making the Deal
First and foremost you have to get started making the deal on a foreclosure. The process is going to move along rather quickly and once it is set for sheriff sale then there is little that you can do. What you need to do is contact the mortgage company and get a payoff amount. This is the bargaining chip that you have. They are going to quote you a price that is high to begin with and you can negotiate from there.
Occupants
There are two ways to handle the people that are living in the home. If you are interested in renting the home then you can keep them in place once you have purchased the home and just start collecting a rental amount. However, if you are looking to flip the home then you will need to have them vacate the property. There are many laws that apply here and you need to be sure that you are staying well within them at every turn.
Final Notes
Knowing the home is very important. Many times people will become so upset over the foreclosure that they will destroy the home. This is something that you do not want to see happen. You have to be sure that you are doing proper inspections and knowing how much you have to come up with for repairs and the price of the home before setting your mind to it. Simply follow the guidelines for real estate investing and ensure that you are protected.
Each year more and more homes go into foreclosure. However, this can be a good and bad thing at the same time. While no one wants to see a person lose their home, the real estate investor stands to make some good deals when investing in homes that have entered the foreclosure process. It is all about timing and how you make the presentation. Most often you are going to be able to buy the home for a fraction of what it is worth.
One thing to understand here is the fact that mortgage companies do not want homes. They want money and they are willing to do just about anything to get it. As such they are not happy about a home going into foreclosure and they are willing to make some serious deals to keep from having to repossess the home. This is where the real estate investor can come in and save the day.
Making the Deal
First and foremost you have to get started making the deal on a foreclosure. The process is going to move along rather quickly and once it is set for sheriff sale then there is little that you can do. What you need to do is contact the mortgage company and get a payoff amount. This is the bargaining chip that you have. They are going to quote you a price that is high to begin with and you can negotiate from there.
Occupants
There are two ways to handle the people that are living in the home. If you are interested in renting the home then you can keep them in place once you have purchased the home and just start collecting a rental amount. However, if you are looking to flip the home then you will need to have them vacate the property. There are many laws that apply here and you need to be sure that you are staying well within them at every turn.
Final Notes
Knowing the home is very important. Many times people will become so upset over the foreclosure that they will destroy the home. This is something that you do not want to see happen. You have to be sure that you are doing proper inspections and knowing how much you have to come up with for repairs and the price of the home before setting your mind to it. Simply follow the guidelines for real estate investing and ensure that you are protected.
How Real Estate Prices Affect Investing
There is no doubt that investing in real estate can be a very lucrative business. There are times when people have made millions in a years time just by knowing what to buy and when to sell it. This is the kind of thing that you are often confronted with when you are watching one of the many real estate marketing gurus on television. They are so excited to tell you about how they have made millions upon millions of dollars with their simple system.
The fact of the matter is that they are telling you little that you should not already know when you are looking to invest. Commonsense should always reign supreme if you are planning on spending the kind of money that you need to get involved in the market. A person who goes in blind, without knowing some simple bits of information is at risk of losing it all. This is something that happens everyday.
However, a solid foundation of knowledge can be built that will help you better understand what you need to know about real estate. When you present yourself with this knowledge you will be ensuring that you are not making one of those rookie mistakes that could spell the end of your career in real estate as well as your credit rating. Below we are going to explore one facet of this knowledge, real estate prices. We hope that you will walk away with a better understanding of how real estate prices affect investing.
Timing
One of the keys here is time. Real estate prices are adjusted according to the market. This is a big deal to the investors out there. They know that when prices are down the buying should begin. This is the very basis of the entire process of investing. You should always buy low and sell high. This means that your buying should be limited to great deals when the market is high and it should shift into overdrive when the market is low.
Circumstances
Real estate prices are also affected by the circumstances of the seller. This is where a bit of advance knowledge comes into play. Knowing that a seller is at risk of foreclosure gives you an edge to better negotiate a price on the property that will bring you profit. This is where it pays to have contacts in the community. The more that you can know about the circumstances surrounding the sale the better off you will be when trying to get a lower price.
Condition and Location
Lastly you have the condition of the property as well as the location. These two key factors are vital for real estate prices. The condition of the property is the overall factor here when you are looking to flip or buy as a rental. The more rundown and out of shape the property is the better price you can get. The same is true of the location. The worse the location the better price but you have to be concerned about resale values in the area where it is located.
The fact of the matter is that they are telling you little that you should not already know when you are looking to invest. Commonsense should always reign supreme if you are planning on spending the kind of money that you need to get involved in the market. A person who goes in blind, without knowing some simple bits of information is at risk of losing it all. This is something that happens everyday.
However, a solid foundation of knowledge can be built that will help you better understand what you need to know about real estate. When you present yourself with this knowledge you will be ensuring that you are not making one of those rookie mistakes that could spell the end of your career in real estate as well as your credit rating. Below we are going to explore one facet of this knowledge, real estate prices. We hope that you will walk away with a better understanding of how real estate prices affect investing.
Timing
One of the keys here is time. Real estate prices are adjusted according to the market. This is a big deal to the investors out there. They know that when prices are down the buying should begin. This is the very basis of the entire process of investing. You should always buy low and sell high. This means that your buying should be limited to great deals when the market is high and it should shift into overdrive when the market is low.
Circumstances
Real estate prices are also affected by the circumstances of the seller. This is where a bit of advance knowledge comes into play. Knowing that a seller is at risk of foreclosure gives you an edge to better negotiate a price on the property that will bring you profit. This is where it pays to have contacts in the community. The more that you can know about the circumstances surrounding the sale the better off you will be when trying to get a lower price.
Condition and Location
Lastly you have the condition of the property as well as the location. These two key factors are vital for real estate prices. The condition of the property is the overall factor here when you are looking to flip or buy as a rental. The more rundown and out of shape the property is the better price you can get. The same is true of the location. The worse the location the better price but you have to be concerned about resale values in the area where it is located.
Dealing with Real Estate Taxes
Real estate or property taxes are something that all property owners have to be concerned with. The amount of tax that you will pay on a specific piece of property varies greatly depending on many factors. These can include location, home condition, annexes, and even boundaries for counties. In some areas of the US there is the chance that property taxes will increase to a point where they are not affordable based on some of the defining factors above.
Still there is very little that anyone can do about the taxes. You have to pay them or you risk losing your property. But there are some ways to understand and deal with the real estate taxes that can actually make them easier to swallow. Below you will find a few pieces of advice that should help you get a hold on the property taxes and ensure that you are not making a mistake that could cost you your home.
Savings
It cannot be stressed enough the value of saving for a rainy day and when it comes to real estate taxes this is doubly true. By simply placing a small amount of your income into some kind of interest baring account and not touching it will save you a lot of hassle when the property taxes come due. You will find that you will have the money to pay them in that account and the stress of paying them will be gone.
Payments
It is best to have the property taxes included in the mortgage payments that you make. This is something that some of the mortgage companies insist upon because it lessens the risk of the person losing the home. This is also a great way to ensure that you are not getting hit with a huge tax bill in the spring and fall because they are already taken care of.
Tax Refund
If you are one of the many people out there that get a sizable tax refund at the beginning of the year then it is a good idea to set some of that money back. In many cases a person can pay off their property tax bill with that one check coming in. This will provide you with a great way to keep the property taxes from becoming a strain on your income.
Loans
If you find that you have a property tax bill that is too high to pay at once then getting a low interest loan to cover it may be the answer. With the low interest loan you are able to make payments over time instead of a lump sum. This means that you can keep your home current with the taxes and still have a certain amount of time to make the regular payments on the loan. Do not fall into the trappings of some companies that are willing to offer the loans with high interest because it will cost you more than the tax bill in the long run.
Still there is very little that anyone can do about the taxes. You have to pay them or you risk losing your property. But there are some ways to understand and deal with the real estate taxes that can actually make them easier to swallow. Below you will find a few pieces of advice that should help you get a hold on the property taxes and ensure that you are not making a mistake that could cost you your home.
Savings
It cannot be stressed enough the value of saving for a rainy day and when it comes to real estate taxes this is doubly true. By simply placing a small amount of your income into some kind of interest baring account and not touching it will save you a lot of hassle when the property taxes come due. You will find that you will have the money to pay them in that account and the stress of paying them will be gone.
Payments
It is best to have the property taxes included in the mortgage payments that you make. This is something that some of the mortgage companies insist upon because it lessens the risk of the person losing the home. This is also a great way to ensure that you are not getting hit with a huge tax bill in the spring and fall because they are already taken care of.
Tax Refund
If you are one of the many people out there that get a sizable tax refund at the beginning of the year then it is a good idea to set some of that money back. In many cases a person can pay off their property tax bill with that one check coming in. This will provide you with a great way to keep the property taxes from becoming a strain on your income.
Loans
If you find that you have a property tax bill that is too high to pay at once then getting a low interest loan to cover it may be the answer. With the low interest loan you are able to make payments over time instead of a lump sum. This means that you can keep your home current with the taxes and still have a certain amount of time to make the regular payments on the loan. Do not fall into the trappings of some companies that are willing to offer the loans with high interest because it will cost you more than the tax bill in the long run.