I showed a foreclosed home today to a previous client. He was looking for a potential rental property in an area where houses will (eventually) appreciate in value since he may be looking to sell the house down the road. He chose Albrightsville, Pennsylvania. He has access to an entire construction crew and has bought fixer-upper homes before which turned out to be good investments for him. I found a winner -- good neighborhood, big house, only a few years old and repairs needed are minimal. The price was unbelievable -- couldn't believe it hadn't been snatched up after 6 days on the market. A steal at asking price and even though I knew he'd insist on a septic inspection, the sellers were open to it. My buyer had just refinanced his house and pulled out money precisely for such an opportunity. Yet, he wanted to lowball his offer. I couldn't believe it! He had lost out on a good deal a few weeks ago, even though he offered full price.
My buyer was not used to the low interest rates available to him. He was calculating that his monthly payment would be much higher than it actually is.
I have recently started a practice of showing prospective buyers different financing scenarios as they are viewing my listings. I've hooked up with a local mortgage banker to provide flyers showing 3 financing options -- 0% down, 20% down and 3.5% down - amount needed for closing; monthly payments, etc. and included pictures of the house. I posted these charts in each house and provide extras that the buyers may take with them. I think they are always pleasantly surprised by the smaller-than-expected monthly payments.