Shopping for discounted real estate

Looking for real estate in a buyer’s market is usually fairly easy, unless you’re cash poor and/or lacking sufficient credit to qualify for a mortgage.

Many now look to one man’s misfortune to land their starter home or their dream house. One’s person bad luck can definitely end up becoming another person’s luck.

Buying a foreclosed home no longer requires showing up at the property on the courthouse steps with a trunk load of cash.

Many banks now sell foreclosures through real estate agents. They can reach a greater number of potential buyers this way and sell the property faster.

Start looking by contacting a Realtor who specializes in foreclosures. Almost every real estate agency has staff who do this. You can also look at specialty sites such as realtytrac.com and foreclosurepoint.com.

Consider this if you buy at an auction. Many homes sold this way will require significant cash- at least a deposit, and you will not be able to inspect the property. You may later find mechanical or structural issues as well as tax liens.

This is why buying a foreclosure from the bank makes sense. A bank will typically clean out liens and permit you to inspect it.

In addition to the inspection, have a termite inspector check the property. These nasty critters can produce significant hidden damage.

Many foreclosures are often abandoned and sometimes vandalized by the last occupants. A contractor may be necessary to restore or repair the home. If necessary, get several bids from licensed contractors- at least three. Review their license status with your state, as well as their insurance policies. A contractor who refuses to share a copy of their insurance policy is one to be avoided. Once the final price and timeframe are agreed upon, do not pay any money up front until the job is complete.

Last, but not least, it’s best to go into this process knowing where your credit stands before you pre-qualify for a loan. No surprises on your credit report will make the process faster, but one or two errors reported by the agencies can tie you up for months.

All Americans are now entitled to one free report a year from each of the credit agencies. Go online to annualcreditreport.com for free reports. They can send you hard copies or you can print them from your computer. A FICO score is available there as well, but it will cost you a few dollars. A mortgage banker should be available to provide that free of charge.

If you come across any errors, contact the creditor directly and ask them to research and correct the errors. Some may require paper work or research, but the creditor should be able to make a correction and confirm the same. Credit bureaus can take up to 90 days to verify the corrected information and share it out, so you may ask the creditor for a note on official letterhead indicating the correction has been made. Take this in hand to your mortgage broker for a rapid rescore of your FICO score and better rates. If the error was reported on a bank note (mortgage, car loan, credit card), ask the bank to expedite your request and fax the correction note to your broker.

Can You Afford It?

I love the Suzie Orman shows where she talks to listeners, reviews their financial situations and tells them whether they can afford to make a certain investment or purchase. (You're great Suzie!)

Unfortunately, too many of us move forward without any thought. Buy now (especially on plastic) and pay for it later. Isn't that what has delivered the country to its current state? For those who say we're not in a recession, I say you're full of bologna- and we're not talking Oscar Meyer.

Check out this link (http://www.hsh.com/calc-howmuch.html) for a mortgage calculator that will give you an estimate of how much you can afford. Always a good idea before you pull out of the apartment complex driveway in your 1989 Corolla and begin looking at million dollar homes. (This is especially true for those of you new to the Rat Race. And, BTW, welcome to the real world! LOL)

And FYI on top of that. For your sake, please pull your OWN credit bureau reports FREE OF CHARGE at http://www.annualcreditreport.com BEFORE you apply for a loan- mortgage or car note. You might save yourself some time and disappointment. Clear up any issues and then go shopping.