Foreclosures have become a dirty word to some and a profit word to others. Here is what you need to know about foreclosures whether you are a buyer or a seller.

For Sellers:

Rule 1 – Stand Tall – Just because you are selling your home and your neighborhood has foreclosures in it, does not mean that you can not sell your home. A foreclosure has a different appeal than a home that is lived in or still has a sane owner. Foreclosures look different and feel different and thus are not for everyone.

Rule 2 – Look Your Best – Foreclosures are often in shambles and the maintenance crews that are paid to work on the properties really have no overseer working to make sure that the work is done to perfection like you would as the owner of the property. Manicure and perfect your property and you will make a quicker connection to a buyer than the foreclosure will.

Rule 3 – Price High – Don’t price your property based on a foreclosure price. Remain as a “not distressed sale” and you will win by getting your price.

For Buyers:

Rule 1 – Be Patient – Banks who own these properties don’t really care what your timeframe is. It could be weeks before you hear that they have sold to someone else so, if time is of the essence for you, you don’t need to buy a foreclosure in most instances.

Rule 2 – Inspect and Inspect Again – It is critical that you understand what condition the property is in. Most people in foreclosure didn’t just get to foreclosure the month that they were kicked out. It is a result of not having money. So, most likely they did not maintain the property whether the problem was big or small. Although most banks will not do the work to get the house repaired, at least you will know whether or not you are getting such a great deal.

Rule 3 – Get A Warranty – Pay for your own home warranty at the time of the purchase. This will allow you to at least budget for the unknown.

Rule 4 – Don’t Pay Attention – Many times buyers who plan to live in the home are shocked by the stories about the previous owners when they meet the neighbors. If you are not going to go to the neighbors first, ignore the stories.

By: Rhonda Duffy

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Although nearly 170,000 homeowners were able to avoid foreclosure in the month of May due to the help of alliance leaders, the number of foreclosures still continued to rise. With more and more mortgage assistance groups preventing foreclosures, the hope is that the overall number in troubled homes will drop. However, the foreclosure crisis continues to plague the real estate market and the economy in general.

Real estate industry experts are saying that foreclosures will continue to rise well into June 2008. Why? The impact of the mortgages interest rate has been slowly depleting the savings accounts and money from people who are just holding on, hoping for the market to turn around quickly. As more and more days pass with the stalled economy, these homeowners are finally admitting defeat and having to petition for a foreclosure despite their valiant efforts. However, more and more homeowners are turning to companies like Hope Now, a mortgage alliance firm to help with their payments.

Hope Now reported that roughly 60% of all the homeowners they work with on a daily basis have changed their payments completely. These repayment modifications have allowed these homeowners to remain in their home and survive without the subprime or variable interest rates they were fighting against. The remaining 40% of homeowners who came to them looked into simple modifications in their mortgage payments to make their financial situation improve. Repayment plans are typically the most important and effective way for homeowners to renegotiate their mortgage. Repayments are the most common solution for homeowners who have fallen behind on their mortgage payments due to layoff or similar situation.

However, repayment plans are meant to be a temporary solution. For that reason, many real estate experts and housing market advocates are saying that simple repayment situations will not be enough to keep the homeowners from the future doom and gloom of the subprime mortgage rates. Repayment scenarios do not reduce the debt involved with the home. Instead, they give the borrower more time to repay the debt they have on top of their typical mortgage payment. In other words, repayment plans do not address the main problem of the mortgage, which is the interest rate and the conditions by which the mortgage was created, forcing them to sell their home.

Despite the trend of foreclosure experts assisting homeowners, foreclosures have continued to rise 7% in the same period of time these firms were providing assistance. Home industry experts forecast that foreclosures will continue to rise at 7% for the next 18 months as more and more homeowners fall victim to the slowed economy and reduction in jobs.

What are institutions like Hope Now doing for homeowners to help them with their payments? For those homeowners dealing with subprime adjustable rate mortgages, firms like Hope Now are petitioning the banks to freeze their introductory low interest rates on subprime ARMs for a minimum of 5 years to prevent foreclosures from dotting the landscape. As these introductory rates hold, the hope is that the homeowner will bounce back financially in order to meet their financial payments in the future.

By: Shaun Greer

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