Now is the time to buy a house
People have a tendency to be afraid of the unknown, and that’s understandable. Fact: Becoming a homeowner is always a great idea, and for a number of reasons. First of all, there is a great tax relief. You can cancel the interest paid on a mortgage loan. Second, houses that are well cared for appreciate in value. When they appreciate in value, they essentially make us money. When you rent a residence, you never make money, you are just paying money. With home ownership, while you are actually paying a mortgage, as long as you decide to sell the property, you will make money. If you choose not to sell, you could refinance your property by taking money out (appreciated amount) and still keep the property. The market will always go up and down. When it goes up, houses are at their highest prices. It’s a time we in real estate refer to as a seller’s market. Which means it is beneficial to sell at that time because demand is high and therefore sellers can get more for the houses they are selling. This is not a good time to buy a house. Yes, you can still find good deals, but sellers don’t offer closing cost assistance and you have to pay more out of pocket to buy the house. You would be buying the house at full market value.
When we’re in a Buyers’ market, (as we are now) buyers can get houses “for sale.” Which means you can buy the house for a price that is below what the house is worth, therefore getting “instant equity”. Instant equity is when a house is worth more than what you are buying it for. Sellers also often contribute to buyers’ closing costs in a buyer’s market, thereby greatly reducing buyers’ out-of-pocket costs. With the economy the way it is now, there are thousands of foreclosed homes on the market. The banks want to take these houses off their books and sell them and they are selling them at reduced prices. The houses are “REO” houses which stands for “Real Estate Ownership”. When you see a house listed as “REO”, that means it is a bank-owned house. Usually these houses have been foreclosed on.
Most of these houses need some type of reform. But that’s okay. There are government-backed loans that will lend the buyer not only money to buy a house, but also the money for repairs. As long as the loan is not more than “value after repair”. As a buyer, you don’t want the loan to exceed the after-repair value because then you’d be “upside down” on the house. Which means you owe more on the house than it’s worth. As a buyer, what you’d like is for the house to be bought at a great price and then fixed up (with a renovation loan) and still be below appraised value. That way you still have equity in your home. If you repair and get appraised value, then that’s okay too, because again, well-maintained homes gain value over time.
So whether you are buying a home from a seller or a home owned by REO. It’s a great time to buy. Go through a real estate agent because a real estate agent will make sure all of your interests are protected and as a Buyer it’s free for you. The seller pays both the buyers’ agents fee and the sellers’ agents fee, but remember that when you want to sell, you’ll pay both agents’ fees. You know what goes, come back. But go out and buy a house, it’s always a great idea. A home provides a stable environment for families in addition to the financial benefits mentioned above. So go out and buy a house with the help of a great real estate agent because it’s a buyer’s market. Everything is on sale, and we all love a good sale!