Real Estate investing in Hemet CA has many excellent opportunities for the seasoned real estate investor as well as the first time investor...and even the first time homebuyer.

The Hemet market values are rapidly approaching the bottom.  I say this, because I am constantly now seeing deals that will have a positive cash flow with a 20% down - which most real estate loans will require, in today's lending world.

Now, please, don't misunderstand what I just said, the values are approaching bottom - not the market itself.  I agree with every other analyst out there - 2008 will definitely see a huge increase in the number of foreclosures and distressed property on the market.  Now is not the time to be selling your home, just because you are ready for a change.

SIDEBAR:  I can get off on another blog about buying up in a down market, for those who do want to sell, as consumers.  Lets say you have a home that was worth $300K and you have lost 20% of your equity -this would equate to a $60K loss of equity.  Now, lets assume you have your heart set on a $500K home that has also lost the same 20% in equity.  In theory, you should be able buy that home for $400K, netting a instant profit of $40K.  This will be discussed in greater detail at a later time. <<<EDIT:  Originally discussed this theory in an earlier blog - PRICE YOUR HOME TO SELL Part 5 of 5 >>>

With bank owned properties, or "Real Estate Owned" (REO as they are referred to) real estate for sale in Hemet, the buyer must realize that the lenders will have their own addendums which will include terms the typical buyer is not use to complying with.

The real estate investor (or consumer homebuyer) must realize that these institutions have devoted assets to protecting the banks.  They are going to want to see all of their transactions handled in the same fashion, so they will not be looking to negotiate any of the terms found in their addendums...with an occasional exception.

What is negotiable is the price you can offer for a property.  If you believe there should be some other form of consideration, then address that in the price you are willing to pay for the property - but don't spend your time asking the bank to fix a window or closet door...cause it just is not going to happen...even if you are a cash deal, ready to close in seven days or less.

If you see something that is totally one sided in the addendums the bank will have you agree to, and you are not comfortable, then just don't do the deal.  There are too many other good ones out there.  Not every lender has the same terms in their addendums, although there are some common themes.

First and foremost, every lender that I have dealt with insists on their own escrow and title company.  This way they can have better control and can keep minimize their costs.

The lender will also want you to close escrow on time.  Don't be surprised if there is a daily per diem of $100, $150 or more for every day the escrow is late.  The banks want this done, without delay.

It pretty much goes without saying, the banks will not be making repairs - you are buying "As-Is".  In California, any seller is required to make sure there are operational smoke detectors and the hot water heater is strapped in for earthquake protection.  That's it.

If you are not comfortable with this type of negotiation, then I suggest you stick to homes that are being sold by consumers - without lender interference.  Remember, the lenders are taking a bath on these REO properties and Short Sales and they are looking strictly at the bottom line.  What may be a $100 repair item, will end up costing the bank $500 or more, when you consider all of the administrative bureaucracy they must contend with...so they keep it simple and just say no to just about anything but money.

Until Next Time, Have a Blessed Day,

John Occhi, Hemet CA REALTOR®
Mission Grove Realty

Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner please call (951-443-6259) for your free copy.

 This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®.  The views and opinions expressed are just that - views and opinions of John Occhi and those who comment.  Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance. 

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I am proud to be a full time REALTOR® with Mission Grove Realty who is proud to be a contributing member of the ActiveRain community.