Registrations foreclosure against property owners have increased dramatically in recent months.
In some areas, this increase is 30-40% higher than last year. Experts say that foreclosures have doubled in the last three years in many places.
Owners must fight to high prices, rising interest rates and mortgages, the adjusting. This is the precipitation.
Over the past few years, banks, mortgage loans, developed many new buyers to afford reserved. "1.00% MORTGAGES!" "$ 800/MO $ 300000 FOR A HOME!"
The buyers came in a record run. 100% financing and record-low interest rates helped some people who previously could not afford homes, home owners, and that helped stimulate the real estate explosion incredible record.
In Nevada, where I live, almost 62% of all mortgages are interest-only ARMs. We are second only to California. But today the interest rates are higher. Combining them with a soft real estate market, and you now have a pressure on property owners who are fighting to the higher payments for adjustable-rate mortgages or are forced to refinance their loans in order to try to reduce their payments.
For example: Let's say you have 80% of the financing over $ 300000 at home in 2004 and have a 3-year ARM to 5000% with a margin of 2.75%. Your mortgage payment $ 1250 per month. It was tight, but you figured it could afford.
If the loan is in this year (+ current margin index) can be an adjustment to the 8000%. That would your payment to $ 2000 per month. They can not afford to house no more.
Sure, you can refinance it and perhaps only increase your payment of $ 100 - $ 200 per month from $ 1250, but what if the life circumstances have changed? Like your credit is not so good? You may have a lot of equity, so that you are still OK, but what happens in a slow market, where you are not gaining much? Or have you removed all your equity through a credit line? Or your house has depreciated because of this purchase? The slower real estate market compounds the problem.
In recent years, homeowners with risky mortgages could take advantage of the rising value of their homes by refinancing at lower prices. Or by the sale.
With housing or falling prices to stabilise, the refinancing option is not available. With a vastly inflated inventory of houses on the market and sales declined by 30% from last year, the sale is not a viable option. Quite simply, rising interest rates and falling home values to a halt.
In 2003, when the market was on fire, the amount of 30 days default rates was half of what it is today. Foreclosures are now much more common, and many experts believe that they are substantially in the coming years.
OK, what does this mean for you and your customers? OPPORTUNITY!
The purchase of a property from the foreclosure market is one of the best ways, all of real estate. However, it is not easy and takes a lot of work.
It is not unusual to save between 10 and 30 percent of the market value on a foreclosure property, if you know where to look.
However, not be lured to think this is a get-rich quick scheme. Most foreclosed properties sell for less than 5% off the market value. The key lies in research, preparation, patience and perseverance.
Experts say that the investors, the best in the foreclosure market spend 30 to 40 hours per week.
There are many Internet sites like www.realtytrac.com detail that these characteristics, and you can also view a list of properties that are in the marketing of standard rep to your favorite titles.
There are many different stages to the process but two important for you.
The first indication is the default (NOD). This will be notified if the lender to the borrower that a default has occurred and that the legal actions proceed MIGHT. This is very early in the process. Once a NOD you will probably have a couple of months to heal before the standard are actually rescue acquisitions. This is the best place for you as an investor to try the property with the best discounts possible.
The next hint is the trustee sale (NTS). This is much worse. This means that the lender has a date to sell your house in a public auction. As an investor, you have to offer against the competition.
The margins are much narrower and you need a lot more knowledge about the property, its value and its potential before forward. The investments "window of opportunity" opens the day that the Lis Pendens, the notice that an action is pending, is submitted. The window closes, the day the property is sold at auction.
The time between these two events enables an investor to work with the owners and lenders to a workout strategy or acquisition of property from the house owner before the sale.
The time, the window remains open, depends solely on state and local laws, as well as the behavior of the owners. Most states sell property within 90-120 days after the first warning.
There are many books and Internet sites that tell you how many different ways to buy pre - and bank-owned foreclosure properties. For the purposes of this newsletter, let's stick with the most profitable method. The pre-exclusion.
Let us examine the best way to try to you or your customers a home in a heavy discount.
Here's what you need to do:
Get pre-qualified for a loan, so that you can act quickly when a property.
Find out which properties are in default by one of the sites like realtytrac.com or via your favorite titles.
Evaluate these properties and narrow your selection based on the most possible return.
Please contact the house owner. Check the property thoroughly and the standard loan documents.
Determine the property owners' needs… does he need cash quickly, or simply get out?
Learn everything from property liens on the land and the payments that a purchase is required.
Calculate your selling price and the potential profits are based on current market conditions.
Negotiations with the lender, the owners and lien holders.
Close the transaction, repair as necessary for the profit and sell!
This is much easier said then done. Keep in mind, the house owner will slammed with letters from the bank, lawyers, billing and collections. Some can even use up to his doorstep.
They are not alone in this idea. There are also other investors how to contact him as well. They all have three ways to contact him. In person, by e-mail or by phone.
You have to understand that many people are upset about rescuing acquisitions with the amount of negative contact, so that they are not in a position to react extremely to hear what you have to say.
The best way is to start with mailings. Let the owners know that you are interested in their financial problem, you have a solution and as a real estate investor, you specialize in homes in his area. Let the landlord know that you are in your e-mail can help him to stop foreclosure, may yet salvage his credit and perhaps even some additional cash.
Be creative and with the various mailing lists! A former client of mine used to send a $ 50 for every bill before the foreclosure owner with a simple notice that basically said: "I care about what you are going through. Here you will find $ 50, to help. If They call me to thank me, let's discuss some way I can help. "While it was expensive, but brilliant, and it works! I shared this with a 27-year-old investor I work with, and he was doing the same thing with success.
After this first letter, not too aggressive. Give the borrower a few weeks and then follow by mail or phone. As you get closer to the auction date, underscore the urgency. Always emphasize that you want to help.
Always polite and understanding. This person is facing one of the most difficult financial challenges of their lives, and they are completely overwhelmed by lawyers and creditors. You have to be the "savior" and not another person hounding him.
Everything you want to do, you are now for a meeting to determine whether he is a candidate for your help. If your session, make sure that the landlord has all of his loans, mortgages and insurance documents available, as well as the foreclosure notice.
You need to carefully examine in order to determine the profit potential. If you want to make an offer on the property, you must repay the loan, ownership and debt or lien information. They must also assess the condition of the property.
Together with the market value and the original amount, you have all the necessary ingredients to formulate your offer. Some investors in foreclosures even very courageous, visiting the property in person without an appointment. One of my customers is firmly convinced investors in the current door-to-door.
But you have to be prepared, as they do at the end of May, a meeting with angry property owners who do not appear, you appreciate his door. Be polite and leave when you asked. Never, under any circumstances, to snoop, inspect, trespass or generally someone unlawfully on the property. They are there as a "saviour", not a snoop.
When you finally your session, you need to quickly assess the needs of property owners. If he seeks to salvage his credit? Is he looking for cash? Did he just want to be bailed? Is he on the verge of bankruptcy? Is there something else he fears? Did he want to stay in the home on a rent-back basis, he can do his feet on the ground?
If you meet his needs, he will be much more receptive to your offer.
Check with the property owner of the house, as you were a home inspector. Use a checklist inspection and keep your information and estimated costs for repair.
Many owners of houses in foreclosure procedures have been struggling financially for a while before they give up. That most likely means the house is not necessary repairs or general maintenance for a while. Experts say NIE, a job at this point, the house owner or money.
If you like the property and believe that you want, make an appointment to meet with him again to go home, crunch the numbers, analyze all of the fundamental rights and pledge payments, and come back with your job. Make sure you factor in all the costs before closing determining this price.
The house owners are not as big as clever as you. They are also very skeptical. Change once made the offer because of a calculation error is not a simple mistake. It will probably kill your transaction.
Make sure that you carefully review all liens, on the land. They also want to ask the landlord if there are any other liens, the "pop" until later.
If you want to be taken seriously as a buyer, you have to be realistic, if the preparation of a bid. Property owners, regardless of their situation, which is not likely to give properties away. They know the value of their home on the open market and is likely to lose before a business where they feel ripped.
Experts say the typical offer is 80% or less of market value.
In some areas, this increase is 30-40% higher than last year. Experts say that foreclosures have doubled in the last three years in many places.
Owners must fight to high prices, rising interest rates and mortgages, the adjusting. This is the precipitation.
Over the past few years, banks, mortgage loans, developed many new buyers to afford reserved. "1.00% MORTGAGES!" "$ 800/MO $ 300000 FOR A HOME!"
The buyers came in a record run. 100% financing and record-low interest rates helped some people who previously could not afford homes, home owners, and that helped stimulate the real estate explosion incredible record.
In Nevada, where I live, almost 62% of all mortgages are interest-only ARMs. We are second only to California. But today the interest rates are higher. Combining them with a soft real estate market, and you now have a pressure on property owners who are fighting to the higher payments for adjustable-rate mortgages or are forced to refinance their loans in order to try to reduce their payments.
For example: Let's say you have 80% of the financing over $ 300000 at home in 2004 and have a 3-year ARM to 5000% with a margin of 2.75%. Your mortgage payment $ 1250 per month. It was tight, but you figured it could afford.
If the loan is in this year (+ current margin index) can be an adjustment to the 8000%. That would your payment to $ 2000 per month. They can not afford to house no more.
Sure, you can refinance it and perhaps only increase your payment of $ 100 - $ 200 per month from $ 1250, but what if the life circumstances have changed? Like your credit is not so good? You may have a lot of equity, so that you are still OK, but what happens in a slow market, where you are not gaining much? Or have you removed all your equity through a credit line? Or your house has depreciated because of this purchase? The slower real estate market compounds the problem.
In recent years, homeowners with risky mortgages could take advantage of the rising value of their homes by refinancing at lower prices. Or by the sale.
With housing or falling prices to stabilise, the refinancing option is not available. With a vastly inflated inventory of houses on the market and sales declined by 30% from last year, the sale is not a viable option. Quite simply, rising interest rates and falling home values to a halt.
In 2003, when the market was on fire, the amount of 30 days default rates was half of what it is today. Foreclosures are now much more common, and many experts believe that they are substantially in the coming years.
OK, what does this mean for you and your customers? OPPORTUNITY!
The purchase of a property from the foreclosure market is one of the best ways, all of real estate. However, it is not easy and takes a lot of work.
It is not unusual to save between 10 and 30 percent of the market value on a foreclosure property, if you know where to look.
However, not be lured to think this is a get-rich quick scheme. Most foreclosed properties sell for less than 5% off the market value. The key lies in research, preparation, patience and perseverance.
Experts say that the investors, the best in the foreclosure market spend 30 to 40 hours per week.
There are many Internet sites like www.realtytrac.com detail that these characteristics, and you can also view a list of properties that are in the marketing of standard rep to your favorite titles.
There are many different stages to the process but two important for you.
The first indication is the default (NOD). This will be notified if the lender to the borrower that a default has occurred and that the legal actions proceed MIGHT. This is very early in the process. Once a NOD you will probably have a couple of months to heal before the standard are actually rescue acquisitions. This is the best place for you as an investor to try the property with the best discounts possible.
The next hint is the trustee sale (NTS). This is much worse. This means that the lender has a date to sell your house in a public auction. As an investor, you have to offer against the competition.
The margins are much narrower and you need a lot more knowledge about the property, its value and its potential before forward. The investments "window of opportunity" opens the day that the Lis Pendens, the notice that an action is pending, is submitted. The window closes, the day the property is sold at auction.
The time between these two events enables an investor to work with the owners and lenders to a workout strategy or acquisition of property from the house owner before the sale.
The time, the window remains open, depends solely on state and local laws, as well as the behavior of the owners. Most states sell property within 90-120 days after the first warning.
There are many books and Internet sites that tell you how many different ways to buy pre - and bank-owned foreclosure properties. For the purposes of this newsletter, let's stick with the most profitable method. The pre-exclusion.
Let us examine the best way to try to you or your customers a home in a heavy discount.
Here's what you need to do:
Get pre-qualified for a loan, so that you can act quickly when a property.
Find out which properties are in default by one of the sites like realtytrac.com or via your favorite titles.
Evaluate these properties and narrow your selection based on the most possible return.
Please contact the house owner. Check the property thoroughly and the standard loan documents.
Determine the property owners' needs… does he need cash quickly, or simply get out?
Learn everything from property liens on the land and the payments that a purchase is required.
Calculate your selling price and the potential profits are based on current market conditions.
Negotiations with the lender, the owners and lien holders.
Close the transaction, repair as necessary for the profit and sell!
This is much easier said then done. Keep in mind, the house owner will slammed with letters from the bank, lawyers, billing and collections. Some can even use up to his doorstep.
They are not alone in this idea. There are also other investors how to contact him as well. They all have three ways to contact him. In person, by e-mail or by phone.
You have to understand that many people are upset about rescuing acquisitions with the amount of negative contact, so that they are not in a position to react extremely to hear what you have to say.
The best way is to start with mailings. Let the owners know that you are interested in their financial problem, you have a solution and as a real estate investor, you specialize in homes in his area. Let the landlord know that you are in your e-mail can help him to stop foreclosure, may yet salvage his credit and perhaps even some additional cash.
Be creative and with the various mailing lists! A former client of mine used to send a $ 50 for every bill before the foreclosure owner with a simple notice that basically said: "I care about what you are going through. Here you will find $ 50, to help. If They call me to thank me, let's discuss some way I can help. "While it was expensive, but brilliant, and it works! I shared this with a 27-year-old investor I work with, and he was doing the same thing with success.
After this first letter, not too aggressive. Give the borrower a few weeks and then follow by mail or phone. As you get closer to the auction date, underscore the urgency. Always emphasize that you want to help.
Always polite and understanding. This person is facing one of the most difficult financial challenges of their lives, and they are completely overwhelmed by lawyers and creditors. You have to be the "savior" and not another person hounding him.
Everything you want to do, you are now for a meeting to determine whether he is a candidate for your help. If your session, make sure that the landlord has all of his loans, mortgages and insurance documents available, as well as the foreclosure notice.
You need to carefully examine in order to determine the profit potential. If you want to make an offer on the property, you must repay the loan, ownership and debt or lien information. They must also assess the condition of the property.
Together with the market value and the original amount, you have all the necessary ingredients to formulate your offer. Some investors in foreclosures even very courageous, visiting the property in person without an appointment. One of my customers is firmly convinced investors in the current door-to-door.
But you have to be prepared, as they do at the end of May, a meeting with angry property owners who do not appear, you appreciate his door. Be polite and leave when you asked. Never, under any circumstances, to snoop, inspect, trespass or generally someone unlawfully on the property. They are there as a "saviour", not a snoop.
When you finally your session, you need to quickly assess the needs of property owners. If he seeks to salvage his credit? Is he looking for cash? Did he just want to be bailed? Is he on the verge of bankruptcy? Is there something else he fears? Did he want to stay in the home on a rent-back basis, he can do his feet on the ground?
If you meet his needs, he will be much more receptive to your offer.
Check with the property owner of the house, as you were a home inspector. Use a checklist inspection and keep your information and estimated costs for repair.
Many owners of houses in foreclosure procedures have been struggling financially for a while before they give up. That most likely means the house is not necessary repairs or general maintenance for a while. Experts say NIE, a job at this point, the house owner or money.
If you like the property and believe that you want, make an appointment to meet with him again to go home, crunch the numbers, analyze all of the fundamental rights and pledge payments, and come back with your job. Make sure you factor in all the costs before closing determining this price.
The house owners are not as big as clever as you. They are also very skeptical. Change once made the offer because of a calculation error is not a simple mistake. It will probably kill your transaction.
Make sure that you carefully review all liens, on the land. They also want to ask the landlord if there are any other liens, the "pop" until later.
If you want to be taken seriously as a buyer, you have to be realistic, if the preparation of a bid. Property owners, regardless of their situation, which is not likely to give properties away. They know the value of their home on the open market and is likely to lose before a business where they feel ripped.
Experts say the typical offer is 80% or less of market value.
Aaron Gordon is a top-producing Senior Mortgage Consultant with Realty Mortgage Corporation in Las Vegas, NV. His monthly newsletter currently goes out to over 10,000 real estate agents and other professionals in the Las Vegas area. He helps over 200 families each year with their mortgage needs in many states. He can be reached by email at aarong@realtymortgage.info or you can see more newsletters at http://www.aarongordon.net
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