7 guidelines for buying land/property

There are a lot of great deals on the market, but buyers beware: Purchasing a property is common with pitfalls.

Foreclosures are dominating the housing market. Right now, there are 1.5 million such homes for sale, and more are expected to be available soon. That provides both opportunities and pitfalls for bargain hunter.
immediately because prices are low doesn't mean you should make unexpected decisions or buy something that isn't right. Here are 7 guidelines for making sure you don't get taken for a travel.

1. Don't get caught up in a feeding anger
"everyone and their grandmas are trying to buy foreclosures," said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn't mean you should lose your head.

Banks put repossessed homes back on the market at cut-rate prices because rapid sales help keep away from the expense of upkeep, such as property taxes, insurance, heat and electricity.



2. make contact with lenders straight

Smart buyers found relations with asset managers at banks. This may return them with inside information or first break at new foreclosures hitting the market.
In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale -- buying a home for less than what the current owner owes on the mortgage -- she should talk directly to the property's asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders



3. Get pre-approved from the lender you want to buy from
If you're trying to buy a property from, say Bank, it can help to get a pre-approved finance from Bank Doing so may cause lenders to look more favorably on your bid if it's similar to others.
Plus, you're not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.

4. deem fix-ups

Most REOs, the industry term for bank owned properties, are sold as is. "The conservative understanding is that banks will do nothing to the houses before the sale," said Kelman.
That can be problematic today because so many foreclosed homes are in less-than-mint situation. Often, the former owners were stressed to pay their bills and may have neglected habitual maintenance. Or, they may have trashed the properties before leave-taking
In 25% of cases, homebuyers plead your case lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next existing bidder -- one who doesn't ask the bank to pay for repairs.
So be willing to consider a home that needs some work -- but budget therefore.

5. appoint a real estate legal representative
Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles.
The answer is to hire a real estate legal representative even in states where home sales are usually completed without one. Considering you're making a six-figure investment, the legal fees are cheap insurance against the risks.

6. stay to make an propose
Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in.
"Talk to the agent selling the property," said Kelman. "The agent may tip his hand. Call up and ask, 'Should I make an offer? What should I come in at?'"
The agent may tell you he has offers at, say $300,000 and you should bid a bit higher, giving you an advantage over earlier bidders.

7. Visit properties with contractors
With so many REOs in seriously deficient shape, it's necessary to go over every inch with someone who can spot problems and tell you how much it will cost to cure them.
A basis crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, a contractor can be very worthwhile insurance.