Land Bargain » Foreclosures http://landbargain.net The Best Online Land Bargain Sun, 17 Oct 2010 12:41:40 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Home Foreclosures Auctions – The Pros and Cons http://landbargain.net/buying/home-foreclosures-auctions-the-pros-and-cons/ http://landbargain.net/buying/home-foreclosures-auctions-the-pros-and-cons/#comments Fri, 23 Jul 2010 00:37:29 +0000 admin http://landbargain.net/?p=144 By Joseph B. Smith

Acquiring a property through home foreclosures auctions can be rewarding indeed. Low prices, quick procedure and security from other competitors are just some of the benefits that these auctions offer. However, auctions also have some negatives and these are the things that home buyers who are new at auction bidding should watch out for.

The Good Part

A house acquired from an auction assures the winning bidder that he is the legitimate owner of the property. Unlike buying from a bank or directly from the homeowner, the law does not allow other bids to be entertained once the gavel has been put down and a winner has been declared. Even if the offer that comes after the bidding is better than the winning one, sellers are not allowed to entertain them and they are legally bound to follow this rule.

Acquiring a house from home foreclosures auctions also offers a quick process that could be finished by the end of the auction day. Winning bidders are usually given 90 days to close the deal, but paperwork and details should already have been worked out by the end of the bidding day so all the buyer needs to do is provide the complete purchase price within that 90-day grace period.

What Buyers Should Watch Out For

One worry that buyers should concern themselves with is the amount of money that they need to take with them when participating at an auction. Most auctions require the winning bidder to shell out 10% of the full price right after being declared the winner. In addition, auction house fees, closing costs and other expenses are also required right after the bidding war. The money should be in cash or in cashier's checks and no excuses will be accepted for such cases.

In some states of the U.S., the requirement is not just 10%. Some auctions call for bidders to have the full amount of their highest bid with them before they are allowed to even participate in the bidding contest.

Buyers who prefer home foreclosures auctions can get a lot of good bargains from these events, but they should have enough financial resources since having the money on hand during the bidding is a must for this type of foreclosure buying.

Joseph B. Smith has been educating buyers on the finer points of Home Foreclosures Auctions at Foreclosure-Auction.net for over five years. Contact Joseph B. Smith through Foreclosure-Auction.net if you need help finding information about Home Foreclosures Auctions.

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]]> http://landbargain.net/buying/home-foreclosures-auctions-the-pros-and-cons/feed/ 0 How to Buy Houses with Little or No Money and No Credit http://landbargain.net/foreclosures/how-to-buy-houses-with-little-or-no-money-and-no-credit/ http://landbargain.net/foreclosures/how-to-buy-houses-with-little-or-no-money-and-no-credit/#comments Fri, 02 Jul 2010 00:09:40 +0000 admin http://landbargain.net/?p=118 Author: Dave Dinkel

Buying houses with little or no money and no credit is not a myth. In fact, the process of using creative financing is exclusive to real estate investing and offers the buyer the maximum leverage possible - zero investment. So technically any profit the investor makes selling or renting the house is an infinite return on his capital ($0)! If there is a myth about using no money to buy a house, it is the myth that an investor must give the seller a monetary consideration to "seal the deal". This is a myth because all contracts read "for the sum of $___ dollars or other good and valuable consideration..." and in this case, the valuable consideration is always the purchase of the property. Hence, no good faith money is needed to put the house under contract. An escrow deposit or "earnest money" deposit may be required depending on the seller and the offer the buyer makes.

It sounds good so lets look at the most common ways to make it happen:

The seller signs a Purchase and Sale Agreement with the stipulation that an escrow deposit will not be made until after the inspection period elapses. If the investor makes a good case for the reason, he may be able to get a 60 day inspection. This may sound outrageous, but it is common practice in our business. It works because we ask for it and compromise to 30 - 45 days instead of the usual 10 or 15 days that most investors get. This extended period gives the investor adequate time to find a buyer either wholesale or retail.

The investor can use seller financing in a couple of forms:
1.The most popular is "Subject To" financing where the seller allows an existing mortgage(s) to stay in place and the investor immediately starts making the monthly payments usually when the homeowner has vacated the property.

2.The homeowner allows a "Subject To" financing with his first mortgage and the buyer gives the seller a second mortgage for his equity for most of or the rest of the purchase price. This is appropriately called "Owner Financing" and can even be more than the purchase price if the seller agrees to help finance the funds needed for the investor s rehab of the property.

3.The seller can lease option the house to the buyer who has a pre-determined time to re-lease option the property to an end buyer. The investor collects a larger "option consideration" that the seller gets, and he charges a markup of the lease payments to have yet another profit center. Lease options have come under regulatory scrutiny for investor abuse so get professional legal assistance before you try one. The industry secret to a lease option with a buyer is to do a "double contract" which is a lease and an option separately, but do a single contract with the seller. The single contract accrues equity with each payment while the double contract is a true lease and the buyer can be easily evicted versus a foreclosure in the case of a single document.

4.An option contract is just what it sounds like "an option with a pre-agreed upon "strike price" or purchase price for a set period of time. The usual "financial consideration" to get an option from a seller is $100 or whatever can be negotiated. The beauty of the option contract is the investor doesn t have to have any carrying or overhead cost for the house.

5.An Equity Agreement is a contract between the seller and the investor that stipulates how the house is to be rehabbed and sold and the proceeds to be split among the seller and the investor. If you do one of these it is critical to have everything in very detailed writing so there is no misunderstanding between both parties.

In summary, the most popular of this partial list of purchase methods for little or no money and no credit is the "put it under contract for the longest possible time" and sell it wholesale. The really large profits come when the investor can work at getting at or near retail when he sells. The limiting factor for the investor is an accurate determination of all costs, expenses, and a salable market price so the house can be priced attractively enough to sell very quickly.

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