3 Important Considerations When Purchasing Real Estate

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Are you looking to purchase real estate in 2020? There are several aspects a buyer should take into consideration when they browse a home listing online or in-person. With this, continue reading and discover a few important considerations when purchasing real estate today.

Signs of water damage

Homebuyers need to appreciate the dangers that water damage presents to a home. Signs of weathering and mold can mean insufficient ventilation, leaks in the plumbing system, or even past flooding. This is just one reason why buyers do not want to ever skip the home inspection. A thorough inspection by a trained professional can shed light on hidden signs of water damage within a home.

Energy efficiency

Lack of insulation can dramatically affect your utility costs. You will end up paying a lot of money in the long run if you purchase a home that is not appropriately insulated. If a home listing is several decades old, you should closely consider the condition of the insulation because it will come into play down the line.

The condition of the roof

Traditional shingle roofs do not last forever. Did you know that it can cost upwards of $10,000 to replace a roof? With this, you want to pay close attention to the condition of the roof on each home listing that appeals to you. You do not want to put yourself in a position where you were unaware that the home you just bought needs an entirely new roof. Be sure that you consider the condition of the roof because it may end up being a deal-breaker on a home that interests you.

HUD Foreclosures

HUD foreclosures and VA Foreclosures are some of the best homes to buy when price is part of the equation. As with most Americans, price is always a concern. If not buying the same house for less, why not buy more house for the same dollar invested? When looking for a good deal it is hard to do better than the VA or HUD foreclosures market. The simple truth is that there are just more VA and HUD homes on the market, as they represent such a large number of mortgages that are generated each year. This translates into more foreclosures just by the magnitude of difference between all others comparing to the two largest.

The two largest also being government owned and operated means that they have less time to wait to make money back on the home. The FHA is especially known for selling HUD homes for less than the average sales price in a given area. FHA foreclosures represent a fraction of HUD but they are still a significant number of homes and both should be considered.

VA (Veterans Administration) and HUD (Housing and Urban Development) have different and unique opportunities for the buyer. Both are often forgiven for the local taxes normally associated with the purchase of a home (this is on a county by county basis). Be sure to ask the local title company or escrow company to look into it for you before closing as this is often missed due to their are not used to dealing with the 2 to 3 percent of the market that VA and HUD foreclosures represent.

Foreclosure Listings Increasing

As the market settled after the mortgage meltdown foreclosure listings also settled and fewer homes were on the market with a placard reading “Bank Foreclosure” in big red lettering. This was a good thing for the entire real estate market. Having an abundance of foreclosures brings the entire market down and it makes it harder for home owners, who would like to move, to get the appropriate price for their home as a similar home down the same street was sold for substantially less and the appraiser is using the foreclosure as a comparable sale.

This is just one of the problems when there are too many foreclosure listings in any area. Another issue is the television set that sits in everyone’s living room harping about the price of homes based on the number of foreclosures and this constant barrage of negative information makes most people sit on the sidelines waiting for the market to either implode completely or to correct itself. Meanwhile while they wait, others are buying foreclosure listings and making great investments.

Whatever the reason, a market can only handle so many foreclosure listings at any given time. The more foreclosures, the lower the market gets and this is a lesson the banks that were foreclosing and selling off realized too late. The market and their investments would have been better off if there had not been a rush to divest themselves of the toxic assets made more toxic by their own actions.