When is it a Good Time to Buy?

by Lance Kettler

In the real estate market there are a few rules of thumb to determine if it is a good time to buy.  One factor is the current interest rate.  At this moment in time the interest rate is at a near historic low. 

Another factor is supply and demand.  It’s widely acknowledged that if there is more supply than demand that prices will go down or can be negotiated down.  Right now we have a buyer’s market, there are significantly more homes available than there are buyers.  As a consequence, sellers have to work harder and concede more in order to win a buyer’s bid. 

One important factor to potential real estate investors is the rent to own ratio.  If the cost of renting is the same price to purchase or even higher investors usually consider it time to buy. 

In our local market we are seeing the cost of renting quickly approaching the cost to purchase.  And in the REO market the cost to purchase in many cases is already significantly lower than the cost to rent. 

Why is this so important?  If you are renting right now and could be spending the same or less to be building equity then you would be smart to purchase.  If you already own a home and are considering purchasing investment property you want to make sure that you can occupy your rental property.  By owning a mortgage that makes the monthly payment less than the market rental value you are ensuring that you will rent your property and that you will make a profit.

By all criteria now appears to be a good time to buy real estate, while it is an excellent time to purchase REO.

REOs on the Rise!

ForeclosureS.com, one of the most recognized authorities in foreclosure statistics is reporting that REOs are up more than 70% in the first quarter of 2008. This number comes as no surprise to those of in the real estate business.  We expect for the number of REOs to rise over the next few months as more and more of the ARM loans reset and home owners are unable to meet the new adjusted mortgage payment, refinance their homes or sell the home quickly for an equitable rate. 
 
This large amount of REO property entering the market is potentially a once in a lifetime opportunity for investors who are looking to make a long term investment in the real estate market.  If you are interested in positioning yourself with valued real estate for bargain prices you need to take a look at what the REO market has to offer. 
 
In all areas of real estate it is important to have the right professional representing your interests; this is especially true in the REO market.  Banks and lenders are reticent to release their property holdings list to the public.  If you aren’t working with the proper professional who has access to this inside information you can lose valuable time and information.  We are the leaders in the Los Angeles REO market, contact our office and ensure that you are working with the highest caliber professionals in the business.
 

REO: The Hot Investment Opportunity of the Decade

Why are REOs so hot right now?  The simplest answer is that there are so many of them. With a record number of homes entering foreclosure and record numbers of homes going on the auction block, it only stands to reason there would be a record number of REO properties.  As we discussed in the last blog REO means property that was foreclosed upon and did not successfully sell at auction.  The property has now reverted to the lender. 
 
Even in economically sound times there are REO properties. But in general a bank won’t have a large inventory of REO properties. They don’t want to have a large inventory of homes.  They aren’t in the real estate business and it actually reflects badly on the bank’s business to have a long list of bad debts.  Currently lenders are finding themselves with an increasing inventory of REOs.  The upkeep and maintenance alone on these properties is expensive and undesirable for the lenders.  They prefer to sell the property than to maintain it.  This creates a motivated seller.
 
Across America we are seeing a large number of REOs entering the market on a daily basis, with motivated lenders looking to sell to qualified buyers.  In some cases we are seeing REO property sold for record discounts at better than average interest rates.  If you are waiting to buy your first home or to further invest in the real estate market – don’t wait.  Let me show you what the REO market has to offer you.  You won’t be sorry.