Develop a system to keep track of properties that interest you. A good tracking system is important as most foreclosure buyers pursue many properties, sometimes over a period of several months.
When you find a property that interests you, perform some preliminary research to make sure the property represents a good bargain opportunity. Your research should not take more than one or two days because you do not want to delay too long before contacting the foreclosing bank. The key pieces of information you need to gather are the estimated market value of the property and the bank's break-even amount.
You or your real estate agent should initiate contact with the bank to express your interest in the property. Before you expend the time and effort to contact the bank, make sure you're fully prepared to buy.
Once you make contact with the bank's asset manager or REO officer, you should arrange to walk through the property (with your agent if applicable) to make sure it fits your criteria as a buyer. If both you and the bank agree to proceed, you should start negotiating the terms of the purchase agreement. A real estate agent can be a valuable resource during the negotiating process.
Once you've arrived at an agreement with the foreclosing bank, you can put the agreement in writing. You should have a local real estate agent or real estate attorney help if you're not familiar with how to draw up a purchase agreement.
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Saturday
Buying Bank Owned Property
Thursday
New home sales posted an unexpected increase in September.
WASHINGTON (AP) -- New home sales posted an unexpected increase in September. Analysts viewed the small gain as highly questionable given the severe credit crunch that rocked the housing industry this summer.
The Commerce Department reported Thursday that sales of new homes rose by 4.8 percent last month to a seasonally adjusted annual rate of 770,000 units. Economists had looked for a 2.5 percent decline.
But analysts noted that the increase came in a report in which the government revised the performance over the past three months sharply lower, showing that sales in August fell to an annual rate of just 735,000, the slowest pace in 11 years.
Sales of new homes surged by 37.7 percent in the West, a highly suspect rebound given what was happening in the market for large loans. Sales rose 0.5 percent in the South but were down in the rest of the country, falling 19.5 percent in the Midwest and 6.6 percent in the Northeast.
Seiders said the pattern this year has been that the government substantially lowers its initial estimate of home sales once more complete data is gathered.
The National Association of Realtors reported Wednesday that sales of existing homes fell by a record 8 percent in September, a far more than expected.
Analysts said home sales are likely to continue to fall for some time to come, with the housing market not stabilizing until inventories come under better control. That problem has been exacerbated by the rising number of homes going into default, which pushes more homes onto an already glutted market.
"We are expecting sales to continue to drop and not turn around until next year," said Patrick Newport, an economist at Global Insight.
The congressional Joint Economic Committee released a report Thursday estimating that 2 million subprime mortgages made to borrowers with weak credit could go into foreclosure over the next 18 months.
The report on home sales showed that the median new home price in September -- the point where half the homes sold for more and half for less -- rose to $238,000, 2.5 percent more than in from August.
Economists said the price increase was skewed by the fact that most of the sales gains were in the West, where home prices are generally more costly.
Many analysts believe that the chance of a recession has increased but they remain confident that the Federal Reserve can head off an outright downturn with further cuts in interest rates. The Fed cut a key rate for the first time in four years in September; Fed officials will meet again next week.Click title for full story.
New Rules of Real Estate 2007
How to play the real estate bounce-back.
The housing market may be melting down, but Business 2.0 worked with Moody's Economy.com to identify 10 cities that have just about hit rock bottom - and offer opportunities for savvy investors to get in while the getting's good.
