Distress comes in many forms. Let us focus on Foreclosure. Once a homeowner gets into a situation in their lives that, for whatever reason, makes it no longer possible for them to make the payments on the mortgage, the loan enters distress. This puts pressure on the homeowner and the bank. The homeowner does not want to lose the home, lower their credit rating and cause embarrassment to the family. At the same time, the bank has its own bills to pay as well. Let us not forget that the banks are run as a business. A business needs income to survive. This is quite simplified, but serves the purpose of this discussion. The bank wants to keep their doors open in order to function as a business. The interest coming in from the loan payments are their income. Once that income flow is disrupted, it causes distress. People, and companies, for that matter, that are in distress, will make decisions that they would not ordinarily make. Banks are no different.

Once the home goes to Foreclosure sale, the seller loses out. They lose the ability to modify the loan terms, sell the home short, and generally wreck their credit rating for many years to come. Most sellers want to avoid this situation, so are willing to accept low offers on their homes. Lower offers than they would EVER consider when not in distress. This should be looked at as an opportunity that will benefit both sides, a true win-win. The only loser is the bank.

The third aspect to consider when looking to buy low, is Auction. Auctions are the wave of the near future. Auctions generally occur when the REO fails to sell on the open market. I say generally because there are many reasons why Auctions occur, let us just focus on this one side of it for now. This type of Auction is usually looked at as a last resort for the bank. A bank will pick a reserve price and a starting bid. This price is commonly quite low comparative to the market data. Buyers are given a chance to bid on the home in a public bidding process. One catch, and there are many, these buyers have to have cash. It is as simple as that. Well, not really, there are a lot of things to consider when buying a house at Auction. Look for blog posts right here on this subject in the near future. There is a lot to discuss on this aspect and cannot wait to lay them out for you. There is no more exciting way to buy. It is not for everyone, and not what I focus on, but wow! What a fascinating culture! And one we will be seeing a lot more of soon!

Referring website; http: //www.coloradohomesalesonline.com/

Depends on which side of the sign you are on. The FOR SALE sign, that is. If you are selling; bad. If you are buying; not good, great! It comes down to basic economics. The more supply that you have, the less demand there is for a product, and therefore, less price. We are in the midst of this phenomenon currently in the housing arena. All over the country there are neighborhoods that are devaluing. If it hasn’t hit your neighborhood, believe me, it’s coming.

Inventories are a key element of the housing economy, if not the key to the housing economy. In a free market society this is what dictates what something, indeed, anything, sells for. And that includes houses. I am starting to sound as obvious as John Madden, “the more you score, the better chance you have to win… BOOM!” But, seriously, this is not rocket science. Prices are down and, in some areas, continue to drop. The lower prices create more demand, and as that demand increases, supplies drop and price has catch up to meet demand. It is fundamental.

Referring website; http: //www.coloradohomesalesonline.com/

Home buying is not for everyone. There are risks involved and knowing the right market is key. I recommend that you look at markets with lower than average unemployment. It is my opinion that that is what will drive us out of this downturn. Once the unemployment numbers start to stabilize, the markets are soon to follow. Consumer confidence is lost in an economy that can’t support jobs. Once the long time unemployed masses start receiving a steady paycheck once again, the housing market will bounce back.

Thehousing market is showing signs of recovery, and in some areas, signs of price increases. Along with the fact that interest rates are incredibly low and the federal government is offering up to $8,000 for homebuyers (see my article from Nov. 24 titled, Extended $8,000 1st time home buyer credit, and you!) These are all reasons to look seriously at real estate. But, I feel that the number one reason to get back into real estate is that there is an incredibly large number of homes in distressed situations. By distressed, I mean financial distress. There are more and more homes going into foreclosure and many more banks now that are willing to negotiate short sales as an alternative to foreclosure. These homes are where you find the deals. Sometimes priced 10% to 15% to even 30% below market! It has been decades since this type of opportunity has presented itself.

Go to www.metrodenvershortsalesonline.com to get more information about Short Sale transactions and to get further information on where to get started.