Check out AfterForeclosureHQ.com. I think you’ll be glad you did.

“You CAN buy again right after foreclosure, even with bad credit. Get empowered: Know your options | avoid the traps.” ~After Foreclosure HQ

We were cruising along at the speed of molasses one second and the next I landed back in the saddle with a hard thump. I instinctively grabbed the saddle horn to keep from hitting the ground and with my hands still tightly gripped around it, I quickly slipped my feet back in the stirrups and re-adjusted myself in the saddle.

This tall, muscular, grey speckled horse was about as laid back as they come. Always lagging behind all the other horses on every trail ride, he’d get slower and slower until I’d put my feet in the stirrups and tap his flanks a little to make him catch up with his buddies. It was something I never minded, though, because I love a slow, relaxing ride through the beautiful Ozark mountains. But nothing ever spooked him until today. A little trickle of water about 3″ wide was running across the trail and Jasper suddenly felt a need to jump over it!?

We turned around and I looked for what caused him to jump, but there was only one little stream of water. At that point, I thought maybe there was some sort of wild life, like a rabbit, that had been in the trail and then jumped into the bushes to hide. Since it was important for me to know what had spooked Jasper, I decided to try walking over the water again. Without hesitation, he confidently stepped forward like nothing was wrong. After about 4 steps we reached the water and he suddenly crow-hopped over the water again! He didn’t seem all that spooked or scared, so why did he jump over the water instead of stepping over it? I was especially puzzled because he had not problem crossing rivers with water up to his belly! LoL

It was obviously lesson time for Jasper, so we went back and forth over that tiny stream of water about 30 times until he was so totally bored and unbothered by it that he even stepped in it a couple of times. Lesson learned. Good boy, Jasper.

The next day I contacted his previous owner and asked about his little crow-hopping escapade only to be told that nothing in particular had happened that made him start jumping over water that way as far as they knew. They just never went to the trouble of teaching him out of that particular bad habit. But it was usually puddles rather than streams of water, so they’d just walk around the puddles because stepping in or over them wasn’t gonna happen without a “lesson time”. So, essentially, they took the lazy way out and let him keep his bad habit and I inherited it.

I believe this is also why so many politicians in this country continue their offensive habit of making campaign promises they don’t keep after we’ve voted them into office. We don’t teach them out of their bad habits by voting them out of office for not keeping their word to us. But we’re not here to talk politics, so I’ll get back on topic. Sorry for the digression.

Photo courtesy of Tambako the Jaguar’s photostream via Flickr

You’ve heard the term “there’s safety in numbers”? Well there’s “power in numbers” too. And the mortgage lenders are taking a beating right now from all directions. They’re thrashing every which way, trying to survive the giant puddle they’ve stepped in up to their armpits. While they’re in crisis mode, why not jump in the game and position yourself to profit from riding the market back up? Obviously this is the right time. The trick will be to get in at the right price in the right location with the right terms. History has consistently shown us that the real estate market always recovers, coming back stronger each time. So we already know what the future holds.

Currently we have the best buyer’s market ever and you probably won’t see another one like it in your lifetime. It’s also the biggest foreclosure market ever. Yes – even bigger than during the Great Depression.

Some say there’s no point in doing short sales in this market, but rather to focus on bank owned properties that have already been foreclosed on. I tend to disagree, but that’s just my perspective. I believe both strategies are still viable in this market in the right situation with the right property if we keep our eye on all the variables and adjust accordingly. I’m especially in favor of creating a win/win situation with homeowners who are up to their elbows in alligators because of the current economy.

Let’s talk price now. We’ll say you have a credit score of 750+, or your parents do, and they’re willing to help you get your first house.

If you don’t have a 750+ credit score please, please get started right away on making that happen for yourself.

Let’s also say you’ve got a 25% down payment saved up, although that’s not necessary in every situation. These things alone give you a powerful edge in every market. In this particular market, it’s like having a super sonic advantage.

The lenders are in extreme liquidation mode right now for residential properties. The commercial real estate market “correction” is tumbling right on the heals of the residential market. In fact, commercial real estate prices have fallen about 40% since the fall season of 2009. Because the financial market is experiencing this unprecedented avalanche of events, you’d be smart to get in the game as soon as possible. The free fall in residential property values is noticeably slowing down and will soon begin to reverse. Buy low now so you can sell high later.

For REO’s (Real Estate Owned by banks) make a deep discount offer. Don’t be afraid to insult a lending institution. The institution isn’t human, it doesn’t have feelings. It’s not like making an offer to an individual homeowner who has emotional attachments to their house. And if your Realtor is wimpy and doesn’t feel comfortable with deep discount offers – get a different Realtor. Remember – You’re in Charge!

The lending institutions are having a fire sale right now. They’re selling bundled packages of REO residential properties to investors for as low as 2-5 cents on the dollar!

Previously, the going rate for a bundle of REO’s was 10-20 cents on the dollar. They typically won’t go this low for one property at a time, but I wouldn’t hesitate to offer $25,000 or so on a $100,000 property if the circumstances support it.

So get brave and make a deep discount offer on an REO. “As is” can be a problem on these, so cover yourself by adding appropriate contingencies in the addendum. If you need some suggestions, let me know and I can share some that I’ve successfully used.

If you can find a property that hasn’t been taken back by the bank yet, but the homeowner is desperate to get out of it because it’s on the fast track into foreclosure, make an offer for a short sale purchase. This way you could potentially buy your first home at a deeply discounted price and, at the same time, you’d be helping the homeowner out of a terrible bind. Just know going in that the bank may not go for as deep a discount on short sales as they might on REO’s.

Now, step over the stream and into the game. Be cautious, not afraid. Be smart, not stuck in fear of the unknown. Your financial future will thank you. Remember – You’re in Charge!

Does this seem doable to you? Or do you have questions that need to be answered first? Feel free to share your thoughts and questions. I may not know the answer to your question, but I will do everything possible to find a viable answer for you as soon as possible.

Now is a good time for first time buyers to buy their first home according to market signals. Are you poised and ready to benefit? If not, get your ducks in a row now because this opportunity won’t last much longer.

With new short sale guidelines finally implemented and the artificially inflated quarterly reports out from the likes of JPMorgan, a unique window of opportunity has opened for some first time home buyers – specifically for those with a credit score of at least 750. For this group, I’d suggest taking a serious look at buying a short sale listing.

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.[1] It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. -Wikipedia

(Read more about the short sale process and potential credit implications here.)

Find a realtor you feel comfortable dealing with. Just remember – you’re in charge. Don’t let anyone lead you around by the nose. There are a lot of honest, hardworking realtors out there who can help, but even so, your trust in them should be tempered with wisdom. They’re only human, too.

Avoid getting caught in the trap of having the same realtor represent both you and the seller. Your best interests could be seriously at risk in this situation. Before signing a buyers agreement with any real estate agent, you could check out their property listings first.

If you’re not interested in making an offer on any of their listings, go ahead and put them to work. If you are interested in one of their properties, you could have another agent represent you in making an offer on just that one property.

In the buyers agreement, there will be a place where you can write in the address for the house you want to make an offer on. That way they’ll only be representing you as a buyers agent on that one property and if you don’t get to buy that particular house, for whatever reason, your buyer’s contract is automatically cancelled. From there, you’re free to use your preferred agent for making all future offers.

Up to this point in time, one of the most frustrating and irritating problems with buying a short sale property has been the big banks and other mortgage holders dragging their feet. Often they show blatant disrespect for everyone concerned by not responding to offers and phone calls in a timely manner.

I remember times when I was negotiating short sale purchases, for clients and often just for myself, when the banks would drag things out for literally months. Hours and hours of my valuable time was wasted making follow up calls to the banks trying to get them to make a decision. It was crazy.

I’m not a huge proponent of big government intervention into our lives, however, I believe these new short sale rules are a good thing for people like you and me. The only problem I see at this point is that not all mortgage holders are required to participate. So before submitting an offer, ask if the bank you’ll be dealing with is a participant. At least, you’ll know what to expect going in and you could even decide to pass on that particular property to avoid that whole game they play – the “this is our game and we make the rules and you’re a nobody to us” disrespect and timewasting game.

Home values are still falling and could drop another 30% in some areas during 2010. Plus there’s all that shadow inventory JPMorgan and other big money players are essentially hiding in order to avoid showing a loss on their books.

These are important things to be aware of, but, with the right strategy, you could still get a great deal in a stable area at a price point that only fluctuates slightly during the final stages of this residential real estate market correction. After that you could find yourself riding that big happy wave of market recovery.

One way to help minimize the risk in this situation would be to require your buyer’s agent to furnish you with a list of all comparable properties for the one you’re interested in buying, not just 4 or 5 so they can justify the price. You may run into some resistance on this, but you’d be wise to insist. Realtor-speak for these are “comps”.

Unfortunately, a large percentage of realtors don’t know how to pull proper comps and it’s too much for me to completely cover in this article. So I’ll just give you the most important basics.

There are also some online websites where you can pull your own comps. They’re okay for initial research, but there’s generally a overall problem with accuracy.

The house you’re interested in buying will be the “subject property” and the comps you get should meet these guidelines:

• Sold- They should all be recently sold properties. The more recent, the better. Especially in this declining market. One nasty little trick I’ve seen pulled on unsuspecting first time home buyers is to include properties that are listed for sale, but not sold yet.
• Location- In the same subdivision as the subject property or in a nearby subdivision that’s very similar. Preferably within a 1-2 mile radius of the subject property.
• Age- Within 3-5 years, give or take. For example, if subject property was built in 2003, the best comps would have been built between 1998 and 2008. The closer to the same age, the better.
• Structure- Same number of bedrooms, living areas, bathrooms and garage bays as the subject property.
• Floorplan*- The floorplan should be as similar to the subject property floorplan as possible. For example, the bedrooms of each property don’t necessarily have to be in the same place within the house.

*NEVER accept a comp with a different number of levels than the subject property. If the house you want is all on one level with no basement, all comps should be the same.

You probably see the pattern by now. The comps should be as much like the house you want to buy as possible. Here’s a good article with more in depth information on how to effectively use real estate compsthat was written as a resource for real estate investors. Because of that, it goes into much more depth than you might find elsewhere.

Finally, we come to a huge final piece to this strategy – Price. I’ll cover this in another post within the next few days.

If I’ve missed covering something, please mention it in a comment.

**For clarity, I’m not an attorney, a financial advisor, a real estate agent or a mortgage loan officer. I’m simply sharing my life experience with you. Seeking the advice of an experienced, licensed professional in any of these areas is always a good idea.

Photo courtesy of Pink Sherbet’s photostream via Flickr

Is now a good time to buy a house?

Based on what you’ve heard here, in the news and from other sources – what’s your opinion?

Consider this:

Fannie Mae released the results of a thought-provoking survey this week. Washington Post article “Faith in homeownership drops, Fannie Mae poll shows” provides a comprehensive overview of the results.

“The survey is Fannie Mae’s first attempt to gauge how the foreclosure crisis has affected public attitudes about homeownership.” -The Washington Post

The hopeful news stories we hear peppered amongst all the doom and gloom probably serve to temper the general public’s mood. Optimistic marketing campaigns of various real estate organizations also help keep us encouraged about how soon this will be over. Now, putting it all together, what’s the first time home buyer’s best strategy at this point?

You may also find the following analysis of interest since it addresses some telling statistics. The real estate market is experiencing the most delicate balancing act of our lifetime.

“Home Price Drop of 30% Possible for 2010″ -by contributor John Lounsbury on seekingalpha.com

The first paragraph of the following article is extremely important. So even if you’re already sick of reading about statistics, at least catch the first paragraph. The waiting game these huge institutions are playing is an important part of the complete picture. My husband had a chance conversation with a J.P. Morgan employee the other day who works with their REO’s. He claims there are over 450,000 properties currently in limbo on their books alone – meaning the owners have stopped making payments (many still live in the properties) and no action has been taken by J.P. Morgan because of federal restrictions created to manage the tsunami of foreclosures. Essentially they’re being released on the public little by little. I’m not saying this is a bad thing – only that it’s important to have all the facts in front of you before deciding your best course of action as far as when to buy a home. Or when to sell for that matter…

The Option ARM Kingpins: Who Holds the Elusive Option ARMs? $189 Billion Securitized and Outstanding and big Three of Wells Fargo, JP Morgan, and Bank of America Playing with Time. -financemymoney.com

Lastly, there’s this msnbc story: “Americans say time is right to buy home: Poll”

So what do you think? Is now a good time to buy a house?

Will you share your thoughts and perceptions? I’d love to hear your opinion.