Let's Talk About It

Many home buyers today are considering purchasing a foreclosed property, primarily because they provide instant equity.

The downside to buying a foreclosed property is many need at least minor repairs and some need major renovations to them before they can be lived in.

Most foreclosures are priced so that the current value of the home plus the needed repairs total an amount that is approximately equal to or less than the current market value of the home in average condition.

But who has $25,000 cash reserves to make the repairs? How many first time buyers are ready for that kind of undertaking? There is a type of loan that will allow a buyer to purchase the home and finance the repairs into one mortgage loan. If repairs total less than $35,000, the only extra step the buyer has to take is to provide written quotes from contractors. If the repairs are going to be over $35,000, then there are a few more steps to undertake just to make sure the repaired value of the home does not exceed the fair market value. Below is a good video that one of my lenders provided that explains step by step how this works.

Don' t shy away from taking advantage of the fantastic opportunities that are currently available in today's housing market. It truly is a great time to buy.

Part of the Economic Stimulus package signed by President Obama is geared toward helping communities with large numbers of foreclosed properties get them into the hands of willing and able homeowners.

The Indiana Housing and Community Development Assistance (IHCDA) program does just that in conjunction with the Neighborhood Stabilization Program. It provides funding to purchase the home, down payment assistance and closing cost assistance. Here is a brochure that explains a little about the program. There is a web link in the brochure to help you determin if you qualify and if the property you are considering qualifies for the financing.

The purchase must be for owner occupied properties...no investors.

It is very rare these days to see a medial source painting a positive picture of the economy in general and the real estate market specifically.

One of the main reasons that home buyers are reluctant to get off the fence today is the idea that they can't get financing for their dream home.

Financing is readilly available. Check out this article about FHA financing.

I have information on my web site about FHA 203k loans that allow you to purchase a home and finance the needed repairs into one loan.

Another sign that we are seeing the bottom of our housing crisis here in central Indiana...Investors, both local and out-of-state are coming out of the woodwork.

They are buying foreclosed properties left and right with the assumption that prices are the lowest they are going to go. If this trend continues, banks are going to be less likely to "deal" on the asking price of their real estate. In the recent past, it required an average of 85% of the list price to put a deal together. That figure now will likely climb.

Some facts and figures for you to digest.

    18,661 - Properties available in MIBOR's area
        852 - Foreclosed properties avaialble

     7,502 - Properties available in Marion County
        425 - Foreclosed properties available

        824 - Properties sold in Marion County in March
        226 - Foreclosed properties sold

        149 - Properties sold in Marion County, 4/1 to 4/11
          39 - Foreclosed properties sold

This translates to 5.6% of available properties in Marion County are bank owned foreclosures. Approximately 27% of all sales in Marion County are of bank owned properties.

There is currently a 9.5 month supply of all properties available. There is only a 1.8 month supply of bank owned properties available.

Call me or email me today to take advantage of these opportunities while they last. I don't believe that it is going to get any better in regards to price or mortgage interest rates.

A first time home buyer is defined as someone who has not owned a home during the last 36 months. The tax credit that is now available to first time buyers should be enough to motivate them to stop renting and start buying.

All a first time buyer needs is good credit and 3.5% cash for a down payment. There are even loan programs available that will allow them to finance needed repairs into their mortgage loan, so there is no need for several thousand dollars of cash for new carpet, paint, HVAC repairs,etc. (See my post below).

Here is a video that will explain the tax credit in detail. It is a true credit and not a loan like the $7,500 was last year...THIS DOES NOT NEED REPAID.

More proof that I believe that we are seeing a real upturn in the housing market nationwide. Yes, it is going to take a few months of this positive news to convince a lot of economists that we have seen the worst, but I am always the optomist.

Sign of life in the real estate market

By Les Christie, CNNMoney.com staff writer
April 3, 2009: 11:51 AM ET