When you consider that in some areas the number of homeowners underwater on their mortgages is upwards of 45 to 50 percent it’s no surprise the number of bank foreclosures is also on the rise.Many homeowners have such an incredible amount of negative equity in their homes that they’d never be in a position to recover and they’re simply abandoning their homes, and their mortgages, and letting them go back to the bank.

For these owners it’s a no win situation. They can either continue making their monthly mortgage payments while they watch the value of their home sink lower and lower or the can ruin their credit forever and simply leave town. And it’s typically the second option that they’re going for since most of these owners have also seen a reduction in income because of the loss of a job or dwindling investments.This might seem like the perfect opportunity for you to pick up some low cost investment property however are bank foreclosures really the wonderful opportunity that they appear to be?

If you’re considering buying back foreclosures you need to keep in mind the reason why the homeowners turned that property back over to the bank in the first place. Because there wasn’t enough equity in the property to make it worth it to them to attempt to sell it themselves. Negative equity happens when you continue to owe more on the property than it’s currently worth which means you’d need to ask far more than market value if you wanted to sell it to get out from beneath the debt.

When a bank forecloses on a property, if it doesn’t sell at a foreclosure sale, it becomes the property of the bank. At that point, the bank takes over maintenance of the house, covers tax liens and association fees and considers that property to be one of it’s assets. Most people assume that after a bank takes possession they’d be happy to let it go to the first one who is willing to buy it. However the bank has money invested in that property, too. There is the original loan balance, the back interest, and all the fees that have been generated since they took ownership. And banks are wise investors, too. The bank does not need to sell that property at a loss for the simple reason that they’re in the business of making money, not losing it, and they get the same advantages of owning property that you or I do.

While it’s true that you can often pick up bank foreclosures for little or no money down, you mustn’t automatically assume that simply because the property is owned by the bank that you’re getting a great deal on the price. It still pays to do your research and find out the market value of the home versus the original selling price, together with the asking prices and market values of comparable homes in the area. Then you will be able to make an informed decision as to whether or not bank foreclosures are really a wise investment.

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These days when someone asks, “What is a buyer’s market versus a seller’s market?” 9 times out of 10 they’re talking about Real Estate. After all, isn’t Real Estate on just about everybody’s mind lately? One of the best ways to measure the state of the economy is to look at the Real Estate market. If it’s a buyer’s market, that typically means the economy is down and people are attempting to sell their homes to get out from beneath their huge mortgages. If it is a seller’s market that typically means the economy is good and more people are looking to invest their extra money in a home. But the most basic answer to the question , “What is a buyer’s market versus a seller’s market?” is that it comes down to the law of supply and demand.

Generally in a buyer’s market there are more homes available than there are buyers. That means that someone who is trying to sell his home is going to have to work extra hard to make it more attractive to the buyers because of all of the other houses there are to choose from. This generally means that home values are lower than normal because of all the competition but you can also do things to increase the market value of your home so you won’t have to lower your price.

A fresh coat of paint, some nice shrubbery and landscaping, clean carpet, clutter free closets and garage, new appliances will all help increase the market value of your home. Together with taking care of repairs like plumbing problems, furnace problems and a leaky roof. To sell your home in a buyer’s market you do not necessarily need to lower the price you just have to make sure it’s worth the price you’re asking.

In a seller’s market there are more buyers than there are homes for sale and this often leads sellers to believe that they can raise the asking price of their homes to astronomical levels. While you usually can get more for your home in a seller’s market simply because there are more buyers bidding against each other, you still have to make sure your home is worth the price you’re asking for it. A seller’s market means that home market values have gone up due to the supply versus the demand. But market value and selling price are two different things.

The market value of your home is based on average selling prices of other homes in your area and the condition of your home. In a buyer’s market, the market value of your home might only be 100 thousand dollars whereas in a seller’s market it may be one hundred fifty thousand dollars. Regardless of whether it is a buyer’s or a seller’s market if your asking price is well above market value you’ll have a tough time selling it because people will have a difficult time obtaining financing due to the asking price being so much more than the market value or appraised value. So when you ask, “What is a buyer’s market versus a seller’s market?” the answer is that it really does not matter so long as your house is worth what you’re asking for it.

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Many first time Louisville home buyers are looking for tips for buying a home during a recession, particularly in today’s shaky economy. They recognize that it’s a buyer’s market right now and they know they should strike while the iron’s hot, however they’ve never bought a home before and aren’t really certain where to begin. Rather than end up like a lot of today’s homeowners who are looking at eviction and foreclosure notices they need to make sure they’re doing the right thing and that they are doing it the right way. So here are some first time Louisville home buyer tips for buying a home during a recession.

The first thing you ought to do is visit your bank or lending establishment and get pre-approved for a loan. Not pre-qualified. All the pre-qualification process does is look at your income and subtract your bills and tell you how much you’d have left over to use for a house payment. You want to get pre-approved which means your bank will do the credit check, verify your employment and income, and take into consideration all your bills and credit cards. Then they will actually pre-approve you for a specific dollar amount. When dealing with your Real Estate agent this pre-approval will give you more credibility and let her know that you’re serious regarding buying a home. It will also help you when it comes time to negotiate the price. If the seller knows you have already been pre-approved he’ll often accept a little lower price because he knows he’s going to get his money faster.

After you have been pre-approved, sit down and make a list of all the the things that you have to have in your home. Not everything that you want, but all of the things that you cannot do without. Maybe an additional bedroom or bathroom. Or the laundry area needs to be on the main floor. Specific things that you absolutely must have in your new home. If you’ve never looked at homes before and you would like to get some ideas of what’s available you’ll do a search of homes for sale within the Louisville marketing area right from your own computer..

Then contact a Louisville Real Estate agent and give them your list and your budget. Be sure to let the agent know if you’re concerned about any particular neighborhoods or schools. Or maybe you’d like to live near work or other family members. The more information you can give the agent the easier it will be for her to find you just the right place to live.

When negotiating your price remember your pre-approval amount. It’s usually a fairly high number compared to your income and you do not have to offer it all on a house. That is just the maximum amount you’ll be able to borrow. Keep in mind that you are also going to have additional expenses as a house owner including taxes and insurance every year. First time Louisville home buyers who are looking for tips about buying a home during a recession should always refer to a Louisville Real Estate agent to get their expert opinions.

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So you’re ready to take a leap and start buying REO property that’s out there while the market is so hot. After all, that guy on the infomercial said you could go out there and pick up foreclosure property for a song and sell it for a million bucks – over night! You’ll be rich! Well you better do a little research because there’s a big difference between buying REO properties and buying foreclosure properties and either way you go it’s going to take a little more than a “song” for you to take possession of that property.

A foreclosure sale takes place before the bank actually becomes the owner of the property and the minimum opening bid usually includes the loan balance, any accrued interest, attorney fees and any fees associated with the foreclosure process. You need to understand that the loan balance is generally a pretty significant amount of money and if there was enough equity in the property to satisfy the loan, or at least most of the loan, the homeowner probably would have sold it himself and paid it off. And that’s why most foreclosure sales don’t even get any bids.

Those foreclosure properties that are not sold then become REO – Real Estate Owned by the bank and the mortgage no longer exists. The bank will then handle evictions if necessary and might do any necessary repairs. They’ll work with the IRS to negotiate partial or full removal of tax liens and they will pay off any association dues that are owed. And contrary to popular opinion, now that the bank actually owns this property it’s in no hurry to sell it. The bank wants to make back it’s investment so the popular myth that you’ll be able to pick these REO homes up for a song is simply that – a myth. Banks now have separate departments for their REO properties and they enjoy the same tax benefits that other property owners do. These houses might be somewhat lower in price but they’re not free and growing on trees.

Before you start bidding on foreclosure properties and buying REO properties it’s best to do some research on each individual property. You’ll want to know about tax liens and mortgage balances and property values and market value. You’ll also need to tour the properties and get an idea of repair costs.

When you attend a foreclosure sale you’re going to need a cashier’s check for the complete amount of the sale so it’s best to have your financing already lined up before you even start. It is also best to know exactly how high you are willing to bid and be ready to stop. Too many buyers think they have to buy every piece of foreclosure property that goes up on the block just because since it is a foreclosure it must be a great deal. As mentioned above – it’s not. So be prepared to step away once you hit your limit.

Before buying REO properties it is usually best to talk to a Real Estate agent who can advise you on things like market value versus the bank’s asking price and how best to get financing that the bank will approve of.

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When you consider that 20% of home sales are the result of an open house, it makes good sense to ask your real estate agent to include your home in her Louisville open house listings. Of course you don’t want tons of people traipsing through your home on the same day you’re doing the laundry and giving the dog a bath. But assuming you’ve got your house in tip top order here are some tips on how to hold a successful open house.

Houses that are priced appropriately and in a high traffic area make for the most successful open houses. And of course your house should be spotless from top to bottom. That means all clutter needs to be picked up, all finger prints off of wall, closets need to be organized, and the garage, too. Clean the carpets if necessary, and the bathrooms need to sparkle. It even helps to organize your kitchen cupboards. Organized cabinets and closets look larger then if they are all stuffed with clutter.

Your Real Estate agent will do a lot of advertising and in all probability even post your open house information on line so do not waste your money on any of your own newspaper advertising. You can help though by making certain that people can find your house. Put huge balloons on the mail box and post signs at the closest intersections pointing folks in the right direction. Bear in mind to remove your cars from your driveway and ask your neighbors to leave the parking spaces in front of your house clear for the day.

Now, as for inside the house, open up all curtains and drapes and let the natural light in. And make sure your windows are clean! Turn on each light in the house except lights that make noises, such as ceiling fan lights. And it’s a great idea to have soft music playing in the background on each floor of the house.

It’s also a good idea to make your house smell good but do not use heavily scented candles and chemical air conditioners because some folks could be allergic to them. Most people prefer to simmer spices on the stove however if you do this be certain to serve a plate of cookies or maybe little finger sandwiches, too. The spices will smell nice and they’ll help a lot, but you will also be making folks hungry and you do not want them dashing out the door to get something to eat. You want them to remain in your home!

Set up a little display that includes flyers telling a number of the features and benefits of your home and how much you enjoy living there and include seasonal pictures so people will see what it looks like at different times of the year. This is very helpful to show off that garden if your open house happens to be during the fall or winter. And be certain to include any documentation you have got on the house such as lot size, square footage and number of rooms.

When you follow these tips you can see how easy it is to hold a successful open house so contact your agent today and have her include you in her Louisville Open House listings.

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