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Foreclosure Purchases: Why NOW is Better than LATER

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By : Karim El Sheikh    99 or more times read
Some people don’t want to put down money on foreclosed properties. Some people believe in waiting for the prices of foreclosed homes for sale to drop down even lower. Some people are simply reluctant to buy them right now.

If you are one of these people, then you may want to think twice after reading these bits of information:

Prices are down; mortgages are down

Foreclosure homes are not only reaching historical lows, but the interest rates of bank mortgages at around 4.6% are reaching those same lows as well. These two factors are the most significant reasons why buying a foreclosure now is better than ever before. The best part is that prices and mortgages are not set to go down to significantly lower levels anytime soon. They’re not set to see any meteoric rises anytime soon as well, but give the American economy enough time to recover and you’ll see housing properties bounce back up again.

Mortgage regulations are getting tighter

The entire reason the real estate market collapsed back in ’08 was because banks and lenders gave out mortgages too easily. Subprime mortgages were all the rage then, as they allowed people with dubious abilities to pay back their loans. Delinquent payments would allow the banks to get back their properties as foreclosure deals and then sell them at a premium all over again. Those days of easy mortgages are over, though, with both private banks and government agencies making it harder and more complicated for interested parties to secure a mortgage.

Rental demand is up; supply is down

Basic economical principle states that something with a high demand but low supply will increase in price. Sure, rentals may seem like an attractive option right now, but landlords will start to take advantage that everyone’s renting out properties and start raising their prices. Even rent to own homes will start seeing price increases as a result – even if those very same homes were bought from foreclosure listings. If you’re the landlord, though, then that’s an entirely different story.

Little serious competition

A lot of people express interest when they see a $400,000 home being sold for half its value while foreclosure property auctions make the whole process look like a whirlwind. The truth, however, is that there are very few real players out there. You will find a lot of properties if you start looking through foreclosure listings, preforeclosure listings or even short sale listings. It is definitely worth your time and effort. You may want to start looking at those homes now, though, before major investors strike a deal with the government and sink their claws deep into government homes like HUD homes.

National statistics are not local statistics

Check up foreclosure news and you’ll find a lot of scary statistics about how foreclosures are dominating the nation and turning neighborhoods into ghost towns. You’ll definitely see that in Nevada, Arizona and California – but not in all states and counties across America. Check the statistics in your area, find home foreclosures in more established neighborhoods and you’ll get a sweet piece of land without having to worry about flagging prices or rising crime rates.
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