What I Learned Trying to Buy a House in 2009
So with less then a week left in 2009 I don't think I will be buying a home before the end of the year. But boy have I learned allot about how the housing market works in this economy. There are plenty of homes for sale, all over, you can pick your city, your neighborhood, your street, there is probably a house for sale there. Can you get the house? Thats a good question.
Are there some deals?
Hell Yes there are?
What are your chances of getting that deal?
Very little.
Types of Homes
For Sale By Owner: So they bought the house, put some work into it, now they want to sell. But the market is low, and the price they paid might be more then the going rate for same in the same neighborhood. Can't blame them for wanting to get money out of their purchase, a house is suppose to be an investment. But in this market they are asking too much so the house sits on the market.
Short Sale: So they need to sell, but know they can't get what they owe on the house back, let alone a profit. So they ask the lending bank to forgive the difference between between what they sell it for and what they owe. Sounds better then foreclosing and the bank getting less. Problem is when you put a bid on, the bank thinks, well someone is willing to pay X for the house, maybe someone else will pay X+1 or more, and the wait for the higher bid. After all they have the other bid to fall back on, so they wait, and wait, and wait. Figuring they don't have to settle to right before it needs to be foreclosed on.
Flip: Someone got a deal on a house that needed work. They put as little money as they can, then put it back for as big as a profit as they think they can get away with. It is very easy to spot a flip, new windows, new paint, nice kitchen (although lacking cabinets). I am not against someone trying to make a little profit, but I am not giving someone a big profit for basically just prettying up the joint and hiding the problems. Luckily there is Zillow.com and you can see the last sale and for how much, then make a judgement call on the work they put into it.
Foreclosure: There are two types of foreclosures; ones in bad shape that needs a lot of work, and those in great shape that are a great deal. Surprising both sell real fast once they go on the market. The ones in great shape will have cash bids in within days of going back on the market. The listing price maybe low, but you better bid high to get it. It can also be months between going off the market as a short sale, and coming back as a cheap foreclosure.
Are there some deals?
Hell Yes there are?
What are your chances of getting that deal?
Very little.
Types of Homes
For Sale By Owner: So they bought the house, put some work into it, now they want to sell. But the market is low, and the price they paid might be more then the going rate for same in the same neighborhood. Can't blame them for wanting to get money out of their purchase, a house is suppose to be an investment. But in this market they are asking too much so the house sits on the market.
Short Sale: So they need to sell, but know they can't get what they owe on the house back, let alone a profit. So they ask the lending bank to forgive the difference between between what they sell it for and what they owe. Sounds better then foreclosing and the bank getting less. Problem is when you put a bid on, the bank thinks, well someone is willing to pay X for the house, maybe someone else will pay X+1 or more, and the wait for the higher bid. After all they have the other bid to fall back on, so they wait, and wait, and wait. Figuring they don't have to settle to right before it needs to be foreclosed on.
Flip: Someone got a deal on a house that needed work. They put as little money as they can, then put it back for as big as a profit as they think they can get away with. It is very easy to spot a flip, new windows, new paint, nice kitchen (although lacking cabinets). I am not against someone trying to make a little profit, but I am not giving someone a big profit for basically just prettying up the joint and hiding the problems. Luckily there is Zillow.com and you can see the last sale and for how much, then make a judgement call on the work they put into it.
Foreclosure: There are two types of foreclosures; ones in bad shape that needs a lot of work, and those in great shape that are a great deal. Surprising both sell real fast once they go on the market. The ones in great shape will have cash bids in within days of going back on the market. The listing price maybe low, but you better bid high to get it. It can also be months between going off the market as a short sale, and coming back as a cheap foreclosure.