The initiative announced last year to convert approximately 180,000 government foreclosures into rental properties through partnerships with private equity firms and other investors is picking up steam this week as both Fannie Mae and Freddie Mac announced pre-qualified bidding for interested parties.

The proposal – which would sell foreclosure homes, often in bulk, to private investors from government inventory – is set to go live in the “near term”, according to the Federal Housing Finance Agency. According to reports, the two government-sponsored enterprises will allow pre-qualification for investors and third parties who want to bid on foreclosure properties owned by the government. This effectively opens the doors for foreclosure investors to get in line for bidding and save time before the full allotment of government foreclosure listings becomes available.

Government foreclosures come from several sources, most notably Department of Housing and Urban Development (HUD homes) and the Department of Veterans Affairs (VA homes). These homes come under government ownership when the federal government – due to its role as the guarantor of the mortgage secured by the property in question – takes possession of the home due to the homeowner’s default.

The hope is that investors and private equity firms will want to capitalize on a large inventory of cheap residential real estate properties that can be converted into income-generating rental properties – which are in high demand and have been for the past two years from previous homeowners, those looking to avoid buying a house in this climate, and those relocating for jobs.

As it stands now, the rental market suffers from a lack of supply while the housing market suffers from a glut of supply – a glut that has kept prices going down more and more with each quarter.

Already several major private equity firms have thrown their hat into the ring and announced intentions to actively participate in the government program. Some estimate that the foreclosure-into-rental market could be worth billions in the long run, and could deliver economic benefits to the economy as a whole beyond the profits obtained by investors if mass purchases cause home values to rise throughout the country.

The timeline for the full implementation of the program is still unclear, but the FHFA is seeking to make this a reality sooner than later – especially given the political pressure from the White House to bring stability to the housing market before presidential elections in November. Chances are the housing market will be a key issue.

Federal Foreclosure-into-Rental Program Picks Up Steam is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The foreclosure market in the U.S. is absolutely saturated with great deals and steals – namely in the form of hundreds of thousands of home foreclosures priced well below fair market value. Couple that with dirt-cheap interest rates and you can easily see why 2012 is shaping up to be one of the hottest years on record for buying foreclosures.

Where should you look, though? Some states are hotter than others, and the success of your venture will depend on finding the right markets. Here are ten states that hold the most promise to budding homeowners, entrepreneurs, and investors looking to score big in the market.

Ten States for Great Foreclosure Savings

One easily way to find foreclosure savings – the amount of money you can expect to save by buying foreclosures versus buying non-distressed properties – is to take the average home sales price in the state and subtract from it the average foreclosure sales price. Then, divide that number by the average home sales price to get the average discount available in the state.

Using that formula, the ten best states are:

Delaware

Georgia

Illinois

Maryland

Massachusetts

Michigan

Ohio

Oklahoma

Virginia

Wisconsin

The average foreclosure discounts for these states range from a low of 37% (Virginia and Georgia) to a high of 50% (Oklahoma). That last number is astounding. Just think – on average, buying a foreclosure in Oklahoma will save you 50% off the market price of a similar property!

The highest average foreclosure sales price was Virginia, with $237,742. The lowest average foreclosure sales price was in Michigan, at $60,211. Michigan also has the highest foreclosure rate in the bunch, with one out of every 346 units in the foreclosure pipeline.

Clearly, states like Michigan – states with high foreclosure rates, low average foreclosure prices, and substantial discounts – are the ideal shopping places for investors looking to turn distressed properties into lucrative investments. Of course, virtually any state has good deals available; all it takes is a little research and some simple math calculations.

Fine-Tuning Your Foreclosure Discounts

To get a better idea of how much you can truly save on a home, take into account the quality of the property itself and estimate how much money you will need to spend on it to make it livable. Also consider the neighborhood for the individual property and do your due diligence. Sometimes the largest discount isn’t the best. (In Michigan, after all, there have been foreclosure homes practically given away for free. The catch? They’re just one notch above condemned.)

Want Terrific Deals on Foreclosure Properties? Check Out These States is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The real estate market today is a veritable garden ripe for picking for foreign investors flush with cash and capital. Last year saw a record number of real estate transactions closed by foreign investors who flocked to hot spots in Florida, New York, and other hot locales, all seeking incredible deals with distressed properties and foreclosures galore. This year is no exception, but while there are still plenty of great deals to be had, there are some potential pitfalls to avoid, too.

Real estate agents and foreign entrepreneurs alike should be cautious and well-prepared when digging into local real estate for some of the best deals in the country.

Make Sure You Bring the Green

One problem that surfaced last year with foreign investors flocking to the U.S. for real estate deals and steals was financing. To put it simply, lenders are less likely to lend to foreign nationals than they are to American citizens – and they aren’t too eager to lend to Americans.

Financing stateside is still possible, of course, especially if the investor is representing or operating as a corporation (see more below for that). But having cash on hand is highly preferable. The main issue with cash is timing, so an experienced real estate agent is a virtual requirement. If you stay too long, you could be taxed as an American citizen.

Additionally, it helps to secure lending – if required – from a lender in your home country, then using the bank’s relationship to have the money transferred for the purchase.

Buy as a Corporation, Not as an Individual

Many foreign investors may already practice this, but it generally is a better idea to buy property as a corporation, rather than as an individual. There is a myriad of reasons why this is so, namely due to American tax laws (particularly estate taxes). You also avoid personal liability issues that could arise if you rent the property and hire a professional property management company to oversee it.

With a B-1 Business Visitor visa, you can even incorporate in the U.S. and buy and sell property (although you will have to have an American property management company manage your holdings).

Distressed Properties Give You More Bang for Your Buck

Finally, be sure to turn to the foreclosure market for the best deals in the market – by far. Prices are still incredibly depressed, so there is plenty of upside potential available. REO homes and HUD homes in particular are prime targets for quick purchases – perfect for foreign investors looking to make a steal in a hot market.

Tons of Opportunities and Potential Pratfalls for Foreign Real Estate Investors in the U.S. is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

If you are considering purchasing a new home or investment property outside of your area, Google Maps should be your new best friend. Never before has it been easier to take the address of your desired property and obtain information in regards to surrounding businesses as well as potentially seeing a satellite view of the home from the street.

The Map View

The number one reason to utilize Google Maps when looking for a new home outside of your area is that it is free. All you have to do is log onto Google Maps and type in the address for the property you are considering purchasing. Instantly you will see a map view of where your home is located, complete with street names and some of the surrounding businesses.

The great thing about this version of the maps offered by Google Maps is that you can often determine everything from the nearest grocery store to nearby schools. You can then click “directions” to quickly find the directions from the home you are considering and other areas of interest such as work, school, and shopping.

The Satellite View

Along with the map view of Google Maps, you can also click “satellite” on the upper right hand corner of the screen in order to see an actual satellite view of the area. Zoom in to see details such as the neighborhood layout. Plus, some addresses will even enable you to take a street view of the property providing you with a better idea of what your home looks like from the road.

While utilizing the satellite feature, you can also determine the general neighborhood condition, including the upkeep of nearby homes. However, when opting for the satellite version of the map it is important to remember that it does not stream live; as a result, the maps are often rather dated.

Join Features

Regardless of whether you are using the map view or the satellite view, you are able to use the plus (+) and minus (-) signs on the left size of the screen to zoom in and out. In addition, you can click on the “A,” which is the address you entered, and then click “search nearby.” By simply typing it something like “pizza” local pizza restaurants will appear. This search feature is a great tool to help you determine how far away the home you are considering is from places you visit frequently.

In the end, Google Maps is a great asset when looking for a new home.

How to Use Google Maps When Looking for a New Home is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Barely three and a half years after the federal government bailed out mortgage giants Fannie Mae and Freddie Mac, the CEO of Fannie Mae, Michael J. Williams, has called it quits.

Williams, 53, was announced as the director of the beleaguered agency in 2008 after the federal government stepped in and placed both firms into government conservatorship. The move has cost taxpayers roughly $150 billion, and that price tag could climb to well above $250 billion – a quarter of a trillion dollars – before it is all said and done.

Since his appointment, Williams has faced intense fire from critics who have blasted Fannie Mae from both sides of the aisle in regards to the agency’s alleged role in foreclosure fraud scandals to over $35 million in executive bonuses granted to key leadership in 2009 and 2010, which led to many foreclosures on the market that had been considered “robo-signed”. Williams last appeared before Congress last December in a hearing regarding the executive compensation packages that became notorious symbols of executive excess in the midst of a housing crisis that continues.

In stepping down, Williams creates yet another opening at the Federal Housing Finance Administration, the independent federal body that oversees both Fannie Mae and Freddie Mac. Given the level of difficulty President Obama has faced with filling key federal positions as of late from Senate Republicans, the successor to Williams may be some time in coming.

There are essentially two questions that emerge as a result of this news. The first question is this: What will become of the agency in the time between now and the eventual appointment of a new director? The answer to this question is unclear, primarily because Senate Republicans constitute a roadblock to virtually any key, high-level executive positions within the Obama administration.

The second question – Will this make any difference in the residential market? – may make the first answer irrelevant anyway. Most critics do not expect significant, lasting change to come as a result of Williams’s resignation. Even in the event of a new successor being appointed and confirmed immediately, it is unlikely that the agency will be able to address the residential market in a meaningful and effective way without the distraction of the executive compensation scandal that is still unresolved.

Williams intends on remaining in the position until a replacement is found. Until then, Fannie Mae continues to own or guarantee roughly half of all home mortgages in existence today in the United States, even as a chapter in the company’s history appears to draw to a close.

Fannie Mae CEO Michael J. Williams Resigns is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Trying to sell a home, or thinking about it in the near future? If so, you have somewhat of a challenge ahead of you, as today’s housing market is definitely a buyer’s market. Selling a home isn’t nearly as simple as it was prior to the housing bubble popping in 2007; now, sellers have to take extra steps and pull out all the stops to make their home as presentable as possible.

One way you can put your home in the best light possible is to stage it appropriately, taking into consideration what people desire when they look for a home. Here we’ll discuss what goes into a successful staging that’ll catch eyes and attract interested buyers eager to buy your property.

What Potential Buyers Look For in a Prospective Home

There are a few factors you will need to consider when staging your home, to take advantage of what most prospective buyers look for when searching for an ideal property.

Layout

Buyers these days love a nice, open layout – a layout that allows freedom of movement and ample living space. A buyer wants to see how a home will look, and a lot of that comes from how the layout is arranged. Try to emphasize clear and open lines of travel from room to room, with a lack of major furniture pieces in the middle blocking traffic and clear lines of sight throughout the house. If you can walk from one end of your home to the other easily, your layout is attractive.

Open Space

To go along with the layout of the home, a buyer wants plenty of open space – space where he or she can use to truly customize the home. Open space makes a home appear larger than it really is. It also reduces feelings of being cramped and cluttered, especially with larger households. Emphasizing open space through a clean and streamlined layout helps immensely.

Special Features

Of course, any special feature that your home has should be prominently featured. Do you have exquisite countertops? Nothing should be obscuring their view or distracting the gaze away from your polished granite beauties in your kitchen. Have a spa or a Jacuzzi? Make it easy to see. Play up to your home’s special features, things that are considered “bonus” features or items and make sure your layout is designed to incorporate them fully.

The Purpose of Staging a Home

Now we will get into the nuts and bolts of staging a home appropriately for a potential showing and for any prospective buyers who come by.

Creating a Better Image

Staging a home involves putting your home in order in a way that makes it look its best – and no home looks its best when it looks empty. You want to create the best possible image for your home, and that involves highlighting its selling points while minimizing its weaknesses.

For example, if your dining room has a beautiful, full-length dining bay with French windows, stage your home with carefully-selected furniture, curtains, and other furnishings to highlight the area. Accent your vaulted ceilings with artwork and other pieces of décor that draw attention upwards. Creating a better image is all about creating an ideal appearance for your home.

Giving an Impression of a Livable House

Staging a home also involves giving your prospective buyer an idea of what the home may look like once it has been set up. A properly-staged home features just enough furniture, décor, and fixtures to make the living space attractive, draw attention to the open space and layout, and present a possibility for the buyer. When you do this, though, try to avoid putting in personal effects; you want to create something of a blank canvas for your buyer’s imagination to use.

A living room with a couple of couches, a coffee table, and a throw rug, accented with a candle or two and soft music is a welcoming and comforting staging for that living space. A warm kitchen with a pleasing aroma and cooking implements casually placed around on the countertops and table is another way to highlight this particular room.

Creating Helpful Suggestions

When you stage a home, you also help the buyer see what he or she should do when fixing up their own home. This doesn’t mean they’ll take your indirect advice, but subconsciously, they will appreciate the appearance of a well-kept home that looks ‘lived in’ – and may even keep the same arrangement.

Home Staging as a Good Selling Tactic

Home staging is a great selling tactic for a variety of reasons, primarily because it presents your home in the best possible light for a wide variety of buyers who want to see the ideal version of a home – not a home that is stripped bare with white walls and no character or personality.

A staged home is an exciting home, full of possibilities. It gets the buyer’s creative juices flowing, instead of presenting the buyer with a completely blank canvas without any suggestions or hints as to what makes the home really come alive.

Staging a home also encourages the homeowner to play around with the layout and furniture as you have presented them. It is guaranteed that any interested buyer will start to mentally place his or her furniture in the rooms instead, to see how it would look versus what you have – and that automatically starts them down the road of a purchase.

At the end of the day, staging a home gives your buyers every incentive to want to buy your home, all things considered equal. It is a must and something worth perfecting when selling your property.

How Home Staging Helps Sell a Home is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

As 2012 begins to kick into full gear, the real estate market is already heating up.

If you’re talking about rentals, that is.

Truth be told, renting has become the fastest-growing component of the overall real estate market over the last year, simply because fewer people are buying homes than they otherwise would in a healthy year. Falling home prices, incredibly-tight lending standards, and stubborn unemployment rates have all contributed to pushing would-be buyers to the other side – renting.

This isn’t to say that renting is inherently “bad” – for many people, renting is the cheaper and wiser option. But for those who want to build up equity in a home, break free of a landlord once and for all, and purchase a home at severely-discounted prices, renting just will not do.

Fortunately (or unfortunately), renting will have a noticeable impact on buying and selling homes in 2012, perhaps even more so than in 2011.

The Market Outlook for 2012

First, we will take a look at the general outlook for real estate as a whole –both in the residential rental market and the new/existing home sales market – to see where we are headed.

Home Sales Outlook

The general consensus among industry experts is that median home prices will continue to fall in 2012, perhaps as much as 3.5% by mid-year. This will impact new and existing home sales, but perhaps not in a negative way. The National Association of Realtors, for example, predicts that home sales will increase by 5%, with new housing starts going up by 15% from 2011. Naturally, this depends on where you live, and largely trends began in 2011 will continue through 2012.

In short, demand for homes will rise – but so will foreclosures. In fact, foreclosure properties are expected to increase throughout 2012 and likely into 2013, meaning the residential real estate market will have plenty of supply in the form of cheap, discounted properties in the form of foreclosed homes.

Rental Market Outlook

By and large, the rental market across the nation will continue to improve as it did throughout 2011. In many metropolitan areas in particular, vacancy rates have plummeted and rental prices have risen sharply. This trend may taper off a tad, but more or less will continue throughout the year – meaning people will be paying more money to rent the same apartment in 2012 as they would have in 2011.

In fact, the proposition that more job growth in 2012 will lower the unemployment rate (as is expected) will only increase this because more people will be relocating for these jobs – which always translates into upward pressure in real estate.

How Foreclosures Benefit the Rental Market

How do foreclosures and rentals interact with each other, and with the real estate market as a whole? Well, when everything above is put together, we see a picture of a lot of people looking for affordable places to live.

Since rental prices are increasing, people will be looking for some relief from rising rates – which could very well come in the form of foreclosures being opened up to renting by investors who want to capitalize on more home foreclosures on the open market. This is especially pragmatic because buying foreclosures and profiting off of an appreciation in value – the traditional way to profit in a down real estate market – may seem less attractive than buying foreclosures and simply renting them out.

We expect higher numbers of foreclosures to provide additional supply in a tight rental market – meaning more families will have more opportunities to find affordable housing, particularly in metropolitan areas. For investors, all of that translates into enormous potential.

How Renting Can Soon Change the Real Estate Market is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

When it comes to buying a home, many things come into play. One of the most important aspects of the traditional home buying process is your agent. Your agents will be doing the negotiations for you; therefore, it is essential that you trust your agent. In order to trust your agent, you should know important things about your agent before entering into the home buying process. When picking an agent, make sure you ask the right questions and do your research beforehand.

Agent Background and Expertise

As with anyone that you hire, you should take into consideration the agent’s real estate experiences. Look online to see if you can find information about the agent including reviews from previous clients. You can also ask the agent to provide you with references, which you can call to obtain detailed information from previous clients. These references can provide you with the best information about what to expect if pursuing the home-buying process with the particular agent.

When doing your research, make sure to determine which areas the agent has the most expertise. What are his or her strengths? Furthermore, ensure that the agent has specific experiences that involve the type of home you desire to purchase. For example, if the agent mainly has experience with rentals and you desire to purchase a foreclosure, then you may need to find a lender with expertise in working with foreclosure properties. It is often best to utilize an agent that does most of his or her work in the area in which you desire to purchase.

Finally, research not only the specific agent but also the company with which the agent is associated. The best way to research the company is to utilize online search engines. Simply type in the company’s name followed by “reviews.” Within seconds you should be able to find numerous reviews from previous clients that will help you to determine the reputation of the company in which your agent is associated.

Finishing Touches

After obtaining information and reviews about the agent and the company online and through references, it is time to finalize your research. Obtain detailed information from the agent about what you can expect throughout the home- buying process if you choose that agent. What is the agent’s workload? Will there be enough time to meet your individual needs or will you merely be a number? Finally, contact the real estate department within your state to ensure that the company and agent both have a great reputation within your state.

After doing your research and determining the reputation of both the agent and the company, if you feel like the agent would be a great fit for your home buying needs then it is time to hire the agent and start the search for your new dream home!

What You Should Know About Your Agent is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

A couple wants to buy a home and begins the paperwork for a mortgage, but is surprised to learn that the bank has turned them down due to having a low credit score.

Sound familiar? For many families in America, that is an all-too common tale, especially in the post-crash years in the real estate market.

The truth is, credit scores are more important than ever before when buying a home. And getting the right score can be a pain – especially if you are fighting an uphill battle, like many Americans. But, there is good news. Getting the right score to qualify is not only possible, but realistic if you take the appropriate steps.

Here is a simple guide to boosting your score so that mortgage loan can become yours.

Checking Your Credit

The first step is to find out what your credit score actually is. Without being aware of your credit score and your record, you’ll have no chance of repairing it – which means your home loan application is marked for failure.

There are three national credit bureaus that work with the federal government to supply you with three free credit reports every year – one from each bureau. They are Equifax, Experian, and TransUnion, and each offers to show you what is showing up on your credit record, the report that lenders review when seeing if you qualify for a loan.

The only way to get a reliable and free credit report is to go to AnnualCreditReport.com and request one. That is the only website that is authorized by the Federal Trade Commission to deliver these reports; any other sources are for-profit entities (or scams).

You can request one report per bureau per year. It always helps to check often, so requesting one report every four months is a good idea.

Cleaning Up/Fixing Your Credit History

When you receive your report, you will be shown:

- Any missing payments to any creditor you’ve had (credit card, utilities, auto, etc.)

- The number of on-time payments

- Any outstanding amounts owed currently

- Any amounts turned over to collection agencies

Start by clearing up any errors that appear on your credit report. These most typically are items that have been paid by you, but are still showing up. You will more than likely have to contact the creditor and request that they fix the mix-up, and may have to show proof of payment.

Also look to see if there are any other collection situations or mix-ups caused by changes of address, name changes, or any other situation – anything that could have resulted in a miscommunication between you and your creditors.

Surprisingly, errors make up a good chunk of what penalizes people on their credit histories – and many are never corrected. Cleaning up your record will be a good start.

Adjusting Your Credit

Contrary to what infomercials may tell you, credit repair is not an easy, one-click fix. It requires months and sometimes years of work to demonstrate diligence, responsibility, and credit trustworthiness. But, it is definitely possible.

If your problem is missing payments on your bills because you forget to make the payments, set up payment alerts on your phone, email, or computer. Request these well in advance so you know that you have something to take care of soon. You can go a step further by signing up for automatic payments to be drafted from a bank account – which ensures your payments are never late (and if they are, it isn’t your fault).

If you frequently run into problems paying for your charges and debts, you’ll have no other option than to restrict your spending. Budget well, consolidate your debt when available, and don’t carry balances on your credit cards if at all possible.

You may have to keep a strict budget for six months to a year before your negative credit score starts to really pick up, but the benefits – including being able to buy a home – are definitely worth it.

By the way, what is considered a “good” credit score? The minimum score for a maximum HUD loan is 580, but you are considered pretty set from a credit score standpoint if your score is 720 or higher. You can still qualify for home loans with credit scores from 600-700, but your chances diminish the lower your score.

Buying a Home? A Guide to Getting the Right Score to Qualify is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Everyone knows just how opportunistic today’s market can be with an abundance of foreclosed homes up for grabs. It seems like new foreclosure listings appear daily, with thousands of investors competing for the best discounted properties available.

Part of succeeding in such a market involves doing one’s homework regarding a particular property and making sure it is a sound investment. That means, among other things, having the property properly inspected. Here we’ll talk about strategies behind foreclosure inspection, why you should have your prospective foreclosures inspected, critical issues that you may encounter, and particular areas of emphasis to cover during your inspection.

Strategies and Tips for Better Inspections

These days, foreclosures run the gamut in terms of quality. Not all are created equal. Dilapidated, abandoned, and neglected foreclosures in the slums are a different beast altogether than recently-vacant, well-maintained, and intact foreclosures in higher-end neighborhoods in the suburbs.

Because of this, it helps to have inspections for your properties. The scope and detail of an inspection will depend on the quality of the home itself. For example, if you are dealing with a foreclosure in a relatively decent neighborhood, and the home appears to be well-maintained and in good order, you could probably deal with inspecting the home yourself for minor repairs and leave it at that. If that is your course of action, it helps to attend a professional home inspection at least once so you can get a good feel for how it is supposed to work.

Let’s say that the home appears to be in worse shape, or could potentially require extensive work. Even if nothing on the outside appears out of order, if your instincts tell you differently, it helps to go with a more in-depth home inspection, particularly with a professional home inspector.

If this is the case, you (or your inspector) will want to pay attention to these critical areas:

- Electrical wiring

o Look for exposed wires, damaged wiring, circuits that don’t work properly, stripped wiring, wiring that is old and not properly upgraded, etc.

- Plumbing

o Foreclosures often are victim of having copper plumbing stripped and sold for scrap. Check and see if everything is in place; if it is, see if there is any evidence of water damage or leaking in the home.

- Roof

o Leaks are a major concern; check the attic if applicable or the ceiling.

- Foundation

o Every foundation needs to be checked for cracking. Crawl space foundations are more susceptible to rotting and termite-infested wood, especially with older homes.

- HVAC

o Are there any missing implements? Are the heating elements properly installed and in good working condition? If not, they could pose a safety hazard.

One smart idea is to hire another trusted contractor or company to perform a second inspection and give you a better idea of what needs to be fixed with the home before you proceed further.

Benefits of Foreclosure Inspections

The main benefit of a foreclosure inspection is to help you determine how sound of an investment a foreclosure may be, so you are not pouring money into a money pit. Again, not all foreclosed homes are equal; some will require extensive, major renovations that could eat away at your profit margin and leave you in the red.

Another benefit is time. If you are purchasing this home for yourself, you can avoid potential issues that you’ll have to correct in the future. If you are trying to fix it and sell it, you will have less work before you.

Finally, inspecting a home makes it easier to price a home and bid competitively, and obtain permits for a home once the purchase has been made. If you know what the home will cost to repair to proper standards, you will have an inside track on pricing your bid or offer and maximizing your spending power.

Steps for Inspecting a Foreclosure Home is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Short sales – distressed properties that sell, by mutual agreement between the buyer, owner, and lender, for less than what is owed on the property – are a great way to obtain a prime real estate investment for interested real estate purchasers. They can be tricky to find and obtain, but are worth the work.

Here are ten tips for short selling in today’s real estate market.

1. The price is set by the lender/bank

The final price for a short sale is determined by the lender, not you or the buyer. Many buyers have learned this the hard way because they submitted an offer that did not come anywhere close to the bank’s asking price. This doesn’t mean you have to lock yourself into the asking price, but you do have to start from there and work your way down. Doing this will increase your odds of the bank accepting your bid.

2. Be wary of going too low

Another tip is to avoid going too low when you submit your first offer. A bank has to balance the benefit of having a buyer take the property off of its hands without having to go through foreclosure and spend more money versus accepting far too little for the property and missing out on a lot of money. If your offer is too low – something akin to 50-70% off of the ask price, in most cases – you are risking a resounding “No!”.

3. Have everything ready to go as soon as possible

This should go without saying, but be sure to have your paperwork in order and ready to go when it comes time to negotiate and close. Speed is of the essence; banks can be fickle, especially if other buyers emerge.

4. Have your agent check comparable homes

This is a big one. You can gain a more accurate gauge of how you should price your offer by checking comparable homes in the area. Do this before putting a dollar sign on your bid; it will make it more realistic and thereby more likely to succeed.

5. Demonstrate your solid financial background

Have great credit? Have you invested previously to great success with other banks and have a track record of successful payments and ownership? If so, showcase it – especially if you are depending on the lender to finance the property with you after you buy it.

6. Try to finance the purchase with only one loan

Having multiple loans as a way to pay for the property is messy and could complicate things – and also make it less likely that you’ll be approved. Seek one loan from a lender to finance your short sale purchase.

7. Seek approval from the owner first

All things considered, you want to talk to the owner and come to an understanding with him or her before you go to the bank. This will save you time and effort and potentially money by having a solid understanding of the home. Plus, if you walk in with a deal pretty much tied up with a bow for the lenders to review, they are more likely to accept than a proposal that doesn’t have the homeowner’s agreement.

8. Home needs repairs? Prepare to pay

Understand this: A bank will try to put the cost of paying repairs to a home on the buyer , i.e. you. Expect to have that come up in the negotiations if your home needs anything other than very minor touches.

9. Understand the other players in the game

There are other players in the game, including other agents and buyers looking for the same deals. They are willing to fight for a great property, so if you have one, understand that the bank may be entertaining offers from other players at the same time.

10. Keep the faith!

Short sales take time. Have patience and keep the faith. If the bank rejects your initial offer – which is common – address their concerns and tender a second offer. Many properties that were purchased would not have been bought if the buyers did not stay the course and stick it out.

Tips for Dealing with Real Estate Short Sales is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Have you decided to take advantage of the current real estate market and purchase a discounted foreclosure property? If so, then it is time for you to find an incredible property and move toward ownership. One of the best ways to buy distressed properties is by attending a foreclosure auction where you can bid on discounted properties and walk away a new homeowner.

Here are the 5 simple steps toward foreclosure ownership through foreclosure auctions:

Step 1: Make a Property List

The first step involves researching foreclosure properties and making a list of homes that interest you. You can utilize a variety of services such as BankForeclosureSale.com to find a long list of foreclosure properties across the country. After making a list of the properties that are appealing to you, then it is time to take a trip to the home to get a better idea of the surrounding neighborhood and the condition of the property.

Step 2: Obtain Auction Information

If you find a property you desire then it is time to find out information about the auction. Keep in mind that these auctions can be postponed and rescheduled; therefore, make sure to keep up with the status of the auction closer to the auction date. Furthermore, obtain detailed information about the auction location as well as become familiar with the bidding process, which often varies by state. The last thing you want to happen is you show up to the auction and your lack of preparedness results in someone else walking away with your dream home.

Step 3: Determine Property Value

As with any home purchase, you need to determine the value of the property so that you know when to stop the bidding. You do not want to bid more than the property is worth. Remember, foreclosure auctions are great for getting bargain properties but in order to get the best deal you must be aware of the current market value.

Step 4: Plan your Bid Beforehand

Now that you have determined that the auction will go on and the property value of you potential new home or investment property, it is time for you to determine how much you are willing to bid on the property. Sometimes we can go overboard when we get in the middle of the auction; therefore, it is essential for you to look at your finances and the property value and determine your stopping bid before the auction starts. Preparing your bidding plan in advance will help you keep from over committing due to the heated competition.

Step 5: Bid, Bid, Bid!

After triple-checking to ensure that your auction has not been postponed, make your way to the auction site. When you arrive, locate the auctioneer and sit back and wait for the auction to begin. Remain confident and remember your stopping bid! If you win the property then make sure to receive all essential documentation before you leave the site.

Congratulations! You could now very well be the proud owner of a new home or investment property as you have successfully navigated the foreclosure auctions waters.

Buying Homes From Foreclosure Auctions is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Politics seems to become involved in just about anything these days – especially when you find yourself staring down 12 months of non-stop, round-the-clock, ultra-partisan political warfare known as campaigning. Somewhere in the midst of this election year, there will be the very real danger that serious issues, like the foreclosure crisis, will either be used as pawns in the bigger game of high-stakes politics or will be ignored altogether.

If recent political developments are any indication, the latter is more likely to occur.

The most recent debates for the Republican nomination for president were held over the past two weeks and featured hours worth of back and forth from the large field of would-be nominees who threw mud at each other over a litany of issues – but rarely mentioned anything about foreclosures. This is not unusual; the only candidate who has really put forth a solid plan for helping people stop foreclosures and deal with the massive surplus of foreclosure listings that are on the market now is Mitt Romney, and his plan was far short of an actual strategy.

As we’ve covered previously, Romney’s plan revolves around the notion that we should just let home foreclosures run through the system uncontested, so that current backlogs can be resolved as quickly as possible. This would clear out the foreclosure process, but would also send a wave of distressed properties into a waterlogged market and could continue to collapse home prices even further – and at a much faster rate.

At least that is some semblance of a position on the issue. The only other time the word ‘foreclosure’ was uttered on stage came when fellow candidate Jon Huntsman, the former governor of Utah, talked about the crisis as one of the problems facing America today. He then proceeded to neglect to mention any real solution for a problem that is facing millions of Americans and has impacted millions more over the past five years.

There is too much at risk for no action. Great bargains are good for investors and homebuyers, but at some point, too much supply and not enough demand are bad for everyone – especially homeowners whose home values plummet even further and create negative equity, contributing further to a cycle of foreclosure.

If the problem worsens – which virtually everyone expects it to do over the next year – the foreclosure problem could be one of the defining issues for the presidential election held next year. And the Republican Party’s refusal to adequately address the problem may cost them dearly.

As Election Year Nears, Politics and Foreclosures Become More Intertwined is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

As another week turns and the middle of November nears, the ongoing foreclosure settlement drama continues –now in its umpteenth month since roughly a dozen national and regional lenders were accused of robo-signing, rubber-stamping, and other fraudulent foreclosure processes.

Now, as December nears and the rumored settlement still hasn’t come anywhere close to being signed, pressure mounts on both sides of the negotiating table for some kind of resolution to slow an impending tsunami of home foreclosures into the market.

One of the rebel attorneys general trying to break away from the negotiations, Martha Coakley of Massachusetts, is coming under increased pressure from both the Obama administration and housing advocates to act a particular way regarding the settlement, currently valued at around $25 billion. Coakley has previously voiced an opposition to the settlement in its current form, arguing that it does not do nearly enough to punish Wells Fargo, JPMorgan Chase, Citigroup, Bank of America, and Ally Financial and the other lenders involved and make sure that these problems are not repeated.

Housing advocates continue to encourage her to reject the proposal and work on her own independent investigation, or perhaps join a probe with other attorneys general, like Beau Biden of Delaware and Eric Schneiderman of New York. The Obama administration, meanwhile, is exerting heavy pressure to settle the negotiation and put this issue behind them in the run-up to the 2012 elections.

On the other coast, California’s AG Kamala Harris is also coming under pressure to agree with the settlement from various community leaders and government officials on the state and federal levels. She has already withdrawn from the negotiation process, and wants to see the banks penalized more heavily for the round of residential foreclosures that were wrongfully executed.

At this point in time, the settlement remains stuck, down from the progress that was being made this summer toward a pending resolution. Hopes that a favorable deal would be reached before the end of the year have apparently evaporated, and both sides are reconsidering the terms of a proposed settlement that will undoubtedly have far-reaching consequences in the real estate industry.

The upcoming elections next fall throw even more pressure onto the situation, as if a veritable flood of foreclosed properties for sale wasn’t enough. Look for some kind of settlement to be reached before the end of spring, with an outside shot at an agreement before the end of the year – but don’t be surprised if it comes later rather than sooner.

An Update on the Foreclosure Settlement Deal is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

When you look at the current real estate market there are a few things that are apparent. First, there is still a high foreclosure inventory, which is great for those considering foreclosure investing. Second, the delinquency rates are still undesirably high throughout much of the country. Third, judicial foreclosure states are taking much longer than state with non-judicial foreclosure processes.

However, how are things going in Nevada?

As foreclosure and delinquency rates rise, Nevada is actually experiencing a significant decline in default notices due to a new state law. Specifically, in September there were 5,360 default notices sent out to homeowners. As of October 25 there were approximately 600 notices sent out throughout the month. Obviously the new state law has definitely had an impact on default notices, which has resulted in a huge decline.

The law, which went into effect on October 1, aims at cracking down on robo-signing in which banks claim to have reviewed cases before sending out default notices. Furthermore, the new Nevada law takes it one step further and will be holding individuals responsible for any false representations they make in regards to titles. In fact, some of the illegal actions that have taken place in Nevada will now be felonies.

Clearly, the new law has forced lenders to at least slow down with sending out default notices as they can be held liable for their faulty actions as of October 1. However, is there really a decline in delinquency or merely a slowing of the paperwork and processing?

The law has threatened to hold individuals liable for their actions, which will definitely slow down the robo-signing that often leads to wrongful foreclosures. Fortunately, this will protect homeowners that have been receiving default notices and entering into the foreclosure process without justification. However, this new law may have the same outcome as judicial foreclosures cases. Although homeowners are giving more protection it may only further prolong the foreclosure process and therefore temporarily hide the true effects.

In the end, Nevada’s law is definitely doing what it is designed to do, which is to make lenders (and individuals) more careful when sending out default notices. Only time will tell whether or not the delinquency rates in Nevada are truly declining or if they are merely being delayed.

Nevada Default Notices Plummet is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Fiserv, a financial analytics company, caused a stir this week when they announced that they were predicting a “triple dip” in home values for 2012. In other words, they expect another dramatic fall in home values across the country due to increased foreclosures to the tune of 3.6% by the middle of summer 2012.

That would create the third dip since 2006, after the first bottom reached in 2009. If you remember, a swarm of residential foreclosures sent prices plunging 31% below their 2006-level peak. The second dip occurred in the winter of 2010. At its lowest point, it represented a price fall of 33% from peak. If this third dip occurs as predicted, it would represent at least 35% lower prices from 2006.

That’s a pretty big number – and those interested in foreclosure investing should take note.

To put that into perspective, take a home that cost $200,000 in 2006. That represents a fairly decent “average” price that would buy you a nice home in most markets. Right now, that same home would cost $138,000. By next June, the same home would cost just $130,000.

Why the triple dip?

Foreclosures are the main drivers behind this move. The foreclosure process is up and running again in most markets, and even though banks haven’t completely opened the throttle yet, they will soon – and that means markets will be saturated with foreclosed homes for sale in just about every region.

Foreclosure auctions will be packed with homes and investors trying to find the perfect deal, which will be far easier to find than it has been. Additionally, financing for these homes will likely be easier than it will be for traditional homes simply because the amount being financed likely will be significantly lower than the already-depressed home values for unsold non-foreclosures.

Of course, not every market in the country will result in a triple dip. In some areas, believe it or not, prices are staying the same or even rising. High-end homes are still strong, and a few choice metro areas are set up for nice rebounds. Fiserv is predicting that roughly 100 out of 385 metro markets monitored will post price increases of at least 5% from the midpoint of 2012 through 2013, and a third of those markets will break the 10% barrier.

Naturally, though, if you want to make the most of the situation and fully leverage your capital, it helps to look to areas that will be hit even worse than the national average. That represents the greatest disparity between full recovery price (the price you can expect when the market levels out) and current available prices – i.e. your profit margin. Las Vegas always seems to find its way on this list and will probably tack on another 15-16% loss before it’s all over. Miami is set up for a similar 13% decline. Many California metro areas will post greater-than-average declines as well.

This prediction is just one forecast, but the reasoning is sound. More foreclosures will enter the fray and current credit is stretched paper-thin in most areas. But, as they say in any other investment vehicle, buy low and sell high. This upcoming year gives you plenty of opportunities for the first part of that money-making equation.

Home Prices Headed for Triple Dip? Maybe – Which Means Triple Opportunity is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

In what is perhaps an unprecedented move, the federal government is allowing 4.5 million current and former homeowners who lost their homes to foreclosure a chance to review their foreclosures for fraud, negligence, or impropriety.

Starting in November, the federal government will send notices to these homeowners that reveal an opportunity to review and appeal any residential foreclosures on primary residences that occurred in 2009 or 2010. Upon a successful review, the homeowner could receive restitution, although it is unclear what form that would take or how much it would cost mortgage loan servicers.

The move comes after a year-long investigation into foreclosure process procedures from some of the nation’s leading banks. Currently, Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial are embroiled in an ongoing settlement dispute with state governments over alleged unethical and illegal procedures, including rubberstamping and robo-signing foreclosures.

The plan was recommended by independent consultants in conjunction with the investigation, and would be supervised by consultants with oversight provided by federal regulators. The end result could be millions of homeowners compensated for the damage wrought by the financial industry.

This idea sounds terrific – obviously, homeowners who were wronged need some sort of appeal process and remedy, and violators of law and basic morality should be punished – but will it do anything to systemically help the real estate market as a whole? In other words, will it help reduce the number of foreclosed homes for sale, or help slow down the rate at which residential foreclosures enter the market?

Probably not – and that is the main concern about a program that sounds great, but ultimately could prove to be of little help for the overall market. One primary benefit is an indirect one; lenders who have to pay restitution will have more of an incentive to avoid similar behavior in the future. Another benefit could show that the government is committed to resolving the problem, but admittedly that could only be for the party that is viewed as being responsible for making the plan happen – reason enough for the other party to oppose it.

Until there is some way to help the 11 million homeowners who are currently underwater, and to help millions of foreclosures for sale leave the market, the real estate market as a whole will not improve permanently – no matter how good of an idea this restitution plan may be.

Millions of Foreclosed Former Homeowners to Get Chance at Foreclosure Review is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Foreclosures have been in the news a lot lately, and by lately we mean mostly over the last five or six years. Record numbers of residential foreclosures and entire neighborhoods sitting largely vacant have left an indelible mark on not just the American market and economy, but our culture as well.

Now they’re leaving their mark on our legal system.

The past week has had several interesting developments in courtrooms across the country when it comes to foreclosures, the foreclosure process, and homeowners’ rights. We’ll take a look at a few cases and events and see what we can glean from a big picture perspective on the market.

North Carolina Court Hears Foreclosure Case

In North Carolina, the state Supreme Court is hearing what would be a landmark case for the state – and possibly other states – on whether or not lenders have to provide original paperwork in order to initiate foreclosure.

It seems relatively straightforward that lenders would have to produce such evidence, but in reality a lot of foreclosure cases have been processed over the past few years without original documentation. The plaintiff is alleging that the documentation was never shown to her, and she has no idea who know owns her mortgage. Wells Fargo, the bank under fire in the case, is arguing that it will provide the documentation if the case is remanded to a lower court – which sounds extremely suspect.

The court more than likely will argue that the exact original copy does not need to be produced, which is standard fare for many contractual disputes (since originals are often destroyed or damaged).

Massachusetts Court Rules Against Homebuyer

In another court ruling, the state Supreme Judicial Court of Massachusetts ruled that a buyer who purchased a foreclosure that had been wrongfully foreclosed on by the bank did not have possession of the property, since the transaction was never lawful to begin with. The ruling was not unexpected but did provide an intriguing glimpse into how faulty foreclosure processes have impacted the legal system.

The buyer purchased the foreclosure at auction like thousands of foreclosure auctions held monthly. But, in his case, the lender who owned the home wrongfully foreclosed on the original homeowner, so there was no transfer of property from the original homeowner to the lender. You can’t buy something that isn’t supposed to be for sale, so the buyer was left empty-handed for his troubles. This closely-watched case will likely be emulated elsewhere in the country.

Florida Case Throws Wrench Into State Foreclosure Process

In a very interesting case from foreclosure-heavy Florida, the 4th District Court of Appeals ruled that a foreclosure affidavit from a bank employee testifying to the validity and existence of original loan documentation on several Wellington, Florida foreclosures was hearsay because the employee had no first-hand knowledge of the documentation itself.

In other words, when challenged to prove the existence of paperwork showing that the bank owned the loan and could initiate foreclosure, the bank instead got an employee to swear that he or she saw “computerized information” showing the documentation – without having any knowledge of the document, the original contract, or anything else related to the case.

This is pretty much the same thing as robo-signing, so it’s no wonder why the Court of Appeals decided to rule in this manner. To say that it has disrupted residential foreclosures in the state is an understatement, though, so it will be highly interesting to see what now comes out of a state that already is ridiculously behind on foreclosure processing.

A Whole Lot of Legal Action Going On in the Foreclosure Market is a post from: Foreclosure Magazine - Read more about how does foreclosure work.