Saw a LinkedIn article that caught my attention about existing home sales being constrained by the tighter supply of homes in May and how prices are continuing to gain (good for home owners due to values and a warning sign to home buyers to get moving faster to find “that home” and buy it up now). Got me to thinking about the 4 ways to buy a home that all should be considered when looking for “that home”:
Newly Built Home – There are still newly built homes on the market. In the Sunday section of the paper these are highlighted with a map. Sometimes there is special financing available through the builder. These are ones I specialize in as I represent owners who “flip” houses….BUT, I work with them to keep their listing prices below or at market value so that Buyers CAN afford these houses.
Resale Home – These are homes for resale by the owner. Sometimes the owner still lives in them and sometimes they are empty. Financing is available through FHA, Fannie Mae and Freddie Mac. All 3 agencies require proof of income, proof of down payment and will pull your credit. They are the normal 30 year fixed mortgages available right now.
Short Sale – These are homes for sale that require homeowner/seller approval and lender approval. The seller owes more than the property is now worth. As an example, the mortgage owed is for $400,000.00, but the house is only worth $250,000.00 right now. The seller and their mortgage holder have to approve the contract for sale. The loan you get will be a typical and normal FHA, Fannie Mae or Freddie Mac 30 year fixed. But you might have to wait – even up to 6 months – for the mortgage holder to approve a lesser pay-off.
Foreclosure – For some reason a lot of people think buying a foreclosure requires a strange and different loan. It does not. BUT FHA, Fannie Mae and Freddie Mac do require an appraisal. The appraisal cannot say the house is a dump and needs lots of lots of work. You will not get a normal and typical 30 year fixed rate loan on a dump. If the foreclosure you are looking at to buy is tired and dirty – which a lot of them are – you can get the typical loan. If the property is a dump and it is obvious, the appraiser will note this and the lender will not approve your loan. Other than that, buying a foreclosure is like buying a resale home – typical and normal.
Lynn Tardibuono – Flipper Chick- Real Estate Agent and Co-Owner of Sun Pacific Mortgage and Real Estate. Serving Sonoma County since 1988. Her number is (707)523-2099 and you can also visit the redesigned website at http://www.sunpacmortgage.com.