The foreclosure real estate market has changed in 2015. Banks had a huge amount of inventory in 2009 but large investors purchased properties in bulk. This reduced the backlog in foreclosed properties. Now, small investors have a chance of getting in to the foreclosure market says Jeff Adams.
Banks are still unloading foreclosure properties and if you are smart, you can easily find affordable properties. Foreclosures are a little different and you may not sure about investing in this sector. In this case, here are a few things that should convince you otherwise.
Research the States
The foreclosure rates vary from state to state. States like California and New Jersey are showing a decrease of 20% to 83% in foreclosed properties. These were prime investment areas for large investment companies and they purchased properties in bulk. Now, real estate rates in these states have increased. To get the best deals, avoid these areas, and choose states like Maine, Delaware, and Utah as they still have foreclosed inventory for sale.
Economic Measures
The Federal Government took several steps to stop and delay the foreclosure process. The process started with loan modifications and economic reforms that slowed down the foreclosure process and allowed homeowners to stabilize their finances.
However, most of these economic measures are designed to terminate in early-2015 to mid-2015. Mortgage rates are already expected to increase from 5% to 5.5% in late 2015 and this could again affect homeowners making their mortgages too expensive. Currently foreclosures have decreased to 80,000 in late-2014. This is a 29.5% decline from 2013 but it could increase again in 2015 resulting in a wider choice for real estate investors and first-time homebuyers.
Watch Out For Landmines
It’s been a long time since the mortgage crisis of 2009. As a result, homes have been vacant for quite some time now. Industry watchers like Jeff Adams recommend that you watch out for problems. He cautions first time buyers particularly. Foreclosed properties are sold as-in and most banks don’t have time to maintain the properties.
As a result, REO or real estate owned properties may have hidden problems. Make sure you check the house before you invest in them. Don’t expect the bank to make repairs or fix things in the property. First visit the property, then budget the price, and purchase the property only after factoring these costs into your budget.
Get Financing in Order
The good news is that credit unions are encouraging owners to buy property. As a result, people entering the market will find conventional loans from banks, credit from small credit unions and even mortgages from large financial institutions. This makes it easier for investors to find and purchase properties for investment.
Industry professional Jeff Adams #1 Real Estate Trainer is very enthusiastic about the current foreclosure market. Although the economy is improving, there is a very good chance that foreclosures will increase in mid-2015 as existing economic policies shut down. In that case, buyers should be prepared with finances and accounting so that they buy the best in the current real estate market.
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