"The housing market is falling apart! This is a horrible time to buy a home, or sell a home or even LIVE in a home!"

Have you been hearing a lot of news that sounds like this lately? Well, economists love, and I mean LOVE, to spread the gloom and doom. When the economy's going great, they don't get any attention. But as soon as the market changes, everybody's listening to them again. So, when you hear all that bad news, keep in mind that it sells newspapers.

That's certainly not to say the market hasn't changed. It is still changing, in fact. But that makes investing in real estate all the more enticing, if you know what you are doing.

But here's the skinny on investing in real estate. It is one of the best decisions you'll ever make. And guess what? I'm here to tell you that this is actually a GREAT time to buy.

There are very few purchases you will ever make in your life that will actually increase in value while you are using them every day. These are called INVESTMENTS, and anyone that knows anything about investments will tell you that good investors are in it for the long haul.

If you are thinking about investing in real estate in the current market, as long as you choose a property that is worthwhile and maintain it well, it will reward you with plenty of equity over the years. If you are a foolish investor that just wants to get in and out and turn a quick profit, this likely isn't the best market for you.

But if you are thinking of investing in real estate the smart way, using pragmatism and patience, this is a great time to buy. Prices have fallen on homes, and so have interest rates. So, you can lock in a mortgage at a fantastic rate and save money on your purchase price.

Prices will inevitably rise back up, and you'll be sitting pretty with a great interest rate and extra profit from your amazingly discounted price. Since sellers often have had their homes on the market for longer than they've wanted to, they may be willing to cut you a deal. That's all the better for you, and they will finally be able to get on with their lives. Everybody wins, especially your pocketbook.

If you are looking to buy a fixer-upper to rent out as an income property, this economy will benefit you, too. Because lenders are leery nowadays about handing out home loans to people with bad credit, and many people have lost their homes because their adjustable-rate mortgages went through the roof (literally), a surplus of renters is soon to hit the streets.

Just don't be overly eager to flip your investment property. If that's your intention, it might take some time before it sells in this market. But by all means, rent it out.

The economy might be cyclical, but history teaches us that investing in real estate is nearly always a great decision for the long term. Despite what the media tells you, today is no exception to the rule.

It is always important that you work to protect yourself, whether you are a landlord that is renting out a home or whether you are the tenant who is renting from a landlord. You never know what can go wrong on both ends of the deal, so having rental insurance is definitely a must. Of course you'll find that there are particular options for renters when it comes to renters insurance and then there is special rental property insurance for landlords available as well. Although many people may think that a landlord should be insured, they often forget to realize that it is so important that they have insurance while they are renting as well. So, let's take a look at both landlord rental insurance and renters insurance for tenants.

Landlord Rental Insurance
Having your own insurance as a landlord is very important if you are going to rent out properties. It is important that you are well protected when you are involved in renting property and good insurance can help to keep you protected if you lose income, if there are legal disputes, and if something bad happens to your property. There are a variety of different options available and coverage for many different situations that is available. However, there are some basics that you'll always want to make sure are included in your policy. Here are the fundamentals of a policy for a rental insurance policy for landlords.

- Property Coverage - First of all, you'll find that property coverage is going to be important if you own rental property. When you go with landlord rental insurance, you'll want to take a look at your policy to see what kind of property coverage you have. You'll want to make sure that your insurance policy covers the rental building itself, any other structures that you have on the property, such as the shed or a garage, and your own personal property that may be stored on the rental property should be covered as well.

- Protection from Lawsuits - Another important thing that you need to look for when it comes to your rental insurance as a landlord is protection from lawsuits. When you are renting out property, this is a huge risk that you will face. If people get injured while they are on your rental property, they could try to sue you. For this reason, having good insurance that will protect you against these lawsuits is important and will definitely come in handy if you every deal with this type of a problem.

- Protection in Case of Loss of Rental Income - Loss of rents coverage is also very important if you are a landlord. If for some reason you end up not getting the income that you are supposed to from your tenants, you still have to come up with the money to pay the mortgage. This type of insurance helps you to make sure that you'll be insured in case you do lose your rental income.

Renters Insurance for Tenants
Of course renters face many risks when they are renting as well and renters insurance is definitely an important purchase. If disasters strike, you'll be at the same risk as someone that owns their own home. While the landlord probably has their own insurance, it is not going to protect all of the things that you own. For this reason it is so important that you have good renters insurance that will provide you with the coverage that you need for all your goods when you are renting. So, let's take a look at some of the things your insurance will cover.

- General Coverage - First of all, let's take a look at the general coverage that you'll get with renters insurance. Your personal property will be protected by your insurance in the case of several different types of perils. Some of these perils that are covered include hail and windstorms, aircraft and vehicle damage, volcanoes, lighting, fires, riots, falling objects, theft, vandalism, smoke, explosions, weight of snow, accidental cracking of water heaters and air conditioners, water damage from appliances, sprinkler systems, air conditioning, and plumbing, freezing of the plumbing, and electrical current damage. Of course it is important to realize that earthquakes and floods are not included. If you think that you may have a problem with either of them, then consider a separate policy.

- Taking Inventory of Belongings - When you are purchasing renters insurance, you'll want to take the time to take inventory of your belongings. This is important, since you'll want to be reimbursed if something happens. You can do this by keeping receipts, documenting with photos or videos, and writing down all the items and serial numbers of valuables that are in your home.

- Other Benefits - There are other benefits to going with rental insurance as a tenant as well. Often your policy will provide you with liability coverage if some falls and sues you. Also, if you have to move out because of a problem in the rental, often the insurance will cover the expenses of living somewhere else if you have to.

Unfortunately there is a huge amount of foreclosure that are going on across the United States, and Minnesota is no expensive. There have been many people who have ended up bailing out on a Minnesota mortgage, only to end up having their home foreclosed on. It is both difficult for mortgage companies as well as homeowners and so many foreclosures are occurring. Even though there is a redemption period in Minnesota that is 6 months if you have a primary residence, you'll find that there are still far too many foreclosures occurring. Let's take a look at the stages of the foreclosure process, the reasons so many lenders are not interested in distressed real estate in MN, and some alternative options to foreclosure that you have as a homeowner.

The Stages of the Foreclosure Process
First of all, it's important that you understand all the stages of the foreclosure process. Basically a foreclosure happens when owners can't make their payments, which leads to the piece of real estate being taken and sold by the lender in order for them to try to recover the money that they lose from the mortgage. Here are three stages in the foreclosure process.

- Stage #1 - You Miss 3-6 Payments - The first stage of the foreclosure process is that you start missing payments. While usually you'll find that the lender can't do something right away, once you miss 3-6 payments, you'll find that this can begin the first stage of the foreclosure process. If you begin missing payments, it is important that you work to find a resolution before it even gets this far in the process. You'll have more options the sooner you try to solve the problem.

- Stage #2 - Notice of Default - The next stage is when you get a Notice of Default. After you have missed too many payments, then a trustee is going to be ordered to record one of these notices by the lender. This is done at the County recorder's Office. This means that you will be notified that you are going to face a foreclosure in the future. Then you have a reinstatement period that will go until about 5 days before the auction of the home.

- Stage #3 - Notice of Sale - The next stage in the process is the Notice of Sale. If the loan is not brought current, then the sale date will be made. The notice of the sale will also be put up on the property as well.

Reasons Lenders Don't Want Distressed Homes
Many times when people are going through a foreclosure, they cease to care about their home. Often they are not able to keep up with repairs that need to be done, which can lead to the homes becoming distressed. Most lenders out there are not going to want to own distressed real estate in MN for a variety of reasons. Here are a few of the reasons that they don't really want these homes that have become distressed.

- Reason #1 - Too Much Work - First of all, dealing with distressed real estate in MN is just too much work for lenders. Usually they come with problems that would have to be fixed before a sale could occur. Lenders just want to get their money and they don't want to spend time working on the property. So, this is one reason that they don't want these homes.

- Reason #2 - Costs Money to Fix Problems - Another reasons that they don't want to deal with distressed homes is that it takes quite a bit of money to fix up these homes much of the time. They are already facing a loss, so the last thing they want to do is actually spend money trying to fix up homes that have been distressed due to problems with foreclosure.

- Reason #3 - They Lose Money - If lenders end up having to deal with distress real estate in MN, usually they end up losing money. They are working to find options where they don't lose a huge amount of money. Distressed homes will just make them lose more money, so they don't want to have to deal with them and will look for other options

Alternative Options to Foreclosure
Of course there are some alternate options to foreclosure that can help out homeowners and lenders alike. Finding an option to foreclosure is definitely a great idea. Here are just a few of the best options to foreclosure that can save the day if you are facing a foreclosure in the near future.

- Option #1 - Refinancing - One option that you have is refinancing when you are trying to avoid foreclosure. In some cases you may be able to get a mortgage refinance that will bring your mortgage current and help you to avoid going through the foreclosure.

- Option #2 - Forbearance - Forbearance on the part of the lender is another option. However, you'll have to prove that you are having financial difficulties if you use this option.

- Option #3 - Short Sale - A short sale is an excellent option that is available if you are trying to avoid a foreclosure as well. Often this helps to lenders to get most of their money, although they probably won't get all of it. However, they are often ready to go with this option if they need to.

- Option #4 - Mortgage Modification - Mortgage modification can be a help as well. If the lender will modify the terms, give you a lower interest rate, or tack on missed payments to the end of the loan, you may be able to avoid the foreclosure, which benefits the lender and the homeowner.

Foreclosure means losing your property to the bank for not being able to repay the mortgage or loans. Usually the banks prefer not to file for Notice of Default, but in order to protect their interests, the banks would do so and once the banks file for the notice, foreclosures will take place and the banks can auction off the properties once the proceedings are final. If you don’t pay, you don’t get to stay.

I can assure you that when someone bought the property initially, unless there was fraud, that the person hadn’t given a thought about foreclosure. Who wants to get into foreclosure? When you get into foreclosure, not only you have a bad credit but you will have bad reputation which makes it even more difficult to get another property using a mortgage or loans for a long period of time. No one wants their property to be foreclosed but there are a few people who might get into foreclosure for some of the following reasons.

The reasons are:

• Got fired from current job
• Can’t work due to medical and health problems
• Too much debt and mounting bill obligations
• Divorce with spouse
• Job transfer to another location

• Real Estate Agents

• Real Estate Signs

• Major bank Web sites

• Asset Management Companies
• Government Agencies
• Auction Houses
• Internet Foreclosure Companies

• It means that the seller is desperate for a way out of the foreclosures.
• You will have a better chance to get a lower price in more desperate times.

• Perhaps the seller would rather go into foreclosure than selling it to you.
• Then you might just move on to other property.

If you have a mortgage and failed to repay the monthly payment, you are in the risk of getting a foreclosure. The lender, mainly the banks will file for Notice of Default and there is nothing you can do once the foreclosure is finalized. However, there are many ways you can avoid and stop a foreclosure from happening. You can find out more about this online or get a professional point of view in this matter.

When a foreclosure happens, the lender such as the banks will take over the properties involved in the foreclosure and try to sell it off at the foreclosure auctions. A foreclosure auction is going to take place to auction off the properties to the public. Before the auction take place, you will be able to see many advertisements whether in the newspapers, billboards and even online banking portals. Some of the legal paper are good places to look. In the Twin Cities area, you would want to look at Finance And Commerce as well as the St Paul Legal ledger.

However, most of the properties have no buyers as the price of purchasing the mortgage is much higher than the market price. Therefore people are not interested in the properties that are more expensive than the market price for similar properties. Why would you pay more for the same property? Unless of course, the banks are willing to reduce the price, and this is usually what happens. Since marketing a home for more than it’s worth will give the bank no chance of unloading the property. There is no way the banks can get people to buy the properties unless they make their property more attractive. In order to solicit an offer, banks often sell at slight discount to true market value-10-20% of a discount on such properties. Investors and the consumers do their homework. The internet and the data it provides is the great equalizer.

Real estate owned or “REO” describes one of the classifications for property owned by a lender. Normally the lender is a bank and the property becomes repossessed by the bank after an unsuccessful sale at a foreclosure auction. This is a normal process as most of the properties in the foreclosure sale are worth less than the amount supposedly owed to the bank.

Therefore people are unlikely to buy such properties and the properties end up in the bank’s inventory. The minimum bid for the foreclosure properties is the same as the total amount of the outstanding mortgage amount. As such, most people are not interested at all at the properties until after the sheriff’s sale- no matter how enticing or beautiful the property might be.

People are smart enough to check out the market value for the similar homes before they buy it to make sure that they are not on the losing side. However, some people might think that it might be profitable to buy a property that has been foreclosured. They might think that if they can get the property at the lowest price, they can sell it back at a higher price. While good in concept, it is unlikely to happen until the current inventory is absorbed and the market starts to march forward once again.

Recently we are seeing wholesale liquidation where numerous properties are disposed of at auction. So what happen when the foreclosure auction fails? The bank will try to sell the property on its own, meaning the bank will remove some of the liens and other expenses included before the property is up for sale in future auctions. The bank might offer the property directly to the public through a Realtor. This is possibly the best way for the banks to get the properties off their listing as the chances to get buyers would be higher and market conditions will dictate the final price.

Now, from a personal point of view, the truth about many of the properties that become REO’s is that most of the REO properties are in bad condition and are poorly maintenanced. You might get a REO property that has a missing door, bad or missing piping and even with broken windows as well as other things you might not want to know about. People in distress will take out their anger at the house and the bank that lent them the money so they could buy the house. These are perfect opportunities for someone with time and some cash to do the repairs. The more repairs required, generally the larger the discount. The types of “dirty dogs” are perfect for investors or real estate agents that can recognize the potential. Banks aren’t in the fix up business. They want to remove the property from their books and move on. You might want to look at these opportunities if they are selling at a low enough price to compensate you for the bad condition of the properties.

A Multiple Listing Service (MLS) is a group of private databases that contain the listing of properties represented by a real estate broker who is representing the seller to share information about the properties with other real estate brokers who represent the potential buyers. The purpose of the MLS establishment is to allow efficient distribution of information. When a real estate agent is introduced to a potential home buyer the agent is able to search the MLS system and get the information about all the homes available for sale in an area. Recently, our Northstar MLS in the Twin Cities Minnesota has created a search field specifically for foreclosed homes. This will allow you pinpoint this type of property more easily.

Why do banks want to get a Realtor to help sell off the properties in the banks inventory? If the banks have too many properties in the inventory, it will do the banks no good to hold inventory of homes-especially in a declining valuation market. If the banks get an agent to help sell off the properties, at least the chances of getting people to buy the properties would be higher, since most buyers use a real estate agent. The banks want to get rid of the properties not keep them. Banks are in the money lending business, not the real estate investment business.

Banks want to get back the money supposedly the previous owner owed them but if they can get at least half of it, they might not mind. In some cases that is better than waiting six more months and now only recovering a third. As long as they can get the money and the property off their listing, the banks would not mind to sell the properties at a lower price compared to the original pricing of the properties. The banks are getting many properties today. Yet, not many people are able to buy them because of the tight mortgage market.

When the real estate agents get the properties as a listing, they will try their best to find potential buyers so they can sell off the properties. Agents are often the bearers of the bad news, bringing in a low priced offer. The main point is to get the properties out of the banks listing inventory, as there are so many more properties being filed into foreclosure everyday. More and more people are having the problems to repay the monthly repayment for the mortgages. Eventually, things will stabilize. But, until then, the buyers have the upper hand.

Now, if you are one of those who want to buy a foreclosure property, it is very important to make sure that you know everything about foreclosure properties, the fees involved when you want to purchase, any hidden cost, additional cost and the total amount you will be paying in the end to get the property. Is it worth paying such a big cost to get a foreclosure property? It sure could be. On the other hand remember the latin phrase “Caveat Emptor”-Buyer Beware. You will have to think about it before you decide whether you want to buy or not.

Home  Buy the Book  Articles  Resources  Customer Service  Site Map  Privacy Policy

Disclaimer:
The author/publisher does not guarantee any results-implicit or otherwise-that you may or may not experience as a result of following the recommendations or suggestions contained herein. Investing in real estate is not for everyone. Investing in real estate involves risk with no guarantee of any return. You can lose money. Invest in real estate at your own peril.
Privacy Policy