Being able to complete do it yourself projects around the house can be a big time money saver over the years. Before you ever get into taking on new projects though, there is the issue of getting the house itself to consider. What follows are some interesting thoughts and considerations to take into account if you have been thinking about getting yourself a cheap home and building up from there. As always, use your own judgement and common sense. These are not recommendations for anyone, simply some thoughts for you to bounce around as you consider making a major investment. If you can purchase your home for a really great price and then go on to save money with do it yourself home projects, you might really manage to come out ahead in the long run.
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Do Worthwhile Inexpensive Homes Exist?
Anyone who has looked on-line at the offerings for any real estate market in the country knows that there are many, many cheap homes for sale. In some parts of the country, quite habitable places can be had for as little as $10,000. Naturally, they will likely be lacking in terms of up to date home maintenance and home decor, and are unlikely to have had any recent home improvements, but at that price some additional investment is easily justified.
Still, such cheap homes often go begging. A big part of the problem is that banks are unwilling to make loans in such low amounts. Real estate agents report that most banks won’t touch any loan of less than $30,000, and some only want them in substantially higher amounts.
If you find a home that suits you in such a low-priced category, probably the best option is to arrange financing through a family member. Young families just starting out who have relatives with substantial equity in their own home may be able to convince them to finance the purchase via a home equity loan.
Such transactions should be fully and carefully documented by a lawyer. A mortgage can be placed on the public record to protect against other creditors getting priority.
If the family member doing the financing has misgivings but still wants to help out, he or she can actually use the proceeds of their home equity to take title to the property. In such cases, the best alternative is probably to then enter into a rent to own style agreement.
An example of how that would work if the lending family member simply wants repaid is that the borrower would make payments over the term of the home equity loan or some shorter period, if feasible. The payments would include an amount to cover taxes and insurance.
While rent to own forms can be found on-line and in books, it’s always best to invest a few hundred dollars in having a lawyer prepare the documents. He or she can sit down with all parties and ensure that what they agree to is actually what gets put in them in order to avoid later hassles.
Making the Most of Current Conditions When Buying and Selling Homes
With the ongoing mortgage crisis afflicting the United States and the dismal record of the government in spurring the economy away from record unemployment levels, many thousands of families are facing the prospect of foreclosure. Often, when a borrower gets word that his or her home is to be taken by their lender they will try to salvage the situation as best they can, resulting in many homes for sale by owner. The thinking is to avoid the need to pay brokerage commissions out of what may be not enough sale proceeds to cover their loan.
With the market place for cheap homes already being glutted with bank owned properties from completed foreclosures, such sellers face a tough row to hoe. While they are motivated to preserve their credit worthiness by paying off their loans, they find it hard to accept that their home lacks the market value it had when times were good.
Despite their careful home maintenance and loving home improvements, it’s a sad fact that they are likely to take a substantial loss on even a successful sale. For someone in a position to purchase a cheap home and wanting to buy as much house as possible, it’s like sitting in the catbird’s seat.
When looking at buying a cheap home for sale by owner, it’s often hard to avoid feeling sorry for the distressed person or family. This is unavoidable, but it makes sense to explore homes for sale by owner even if you suppose that you can’t afford to pay what they want or need to sell and pay off their loan.
A potential seller will be able to tell you in detail about the condition of the house. Once he or she is gone, it’s a pipe dream to imagine that the lender will be bothered to even assess the condition of the property, much less talk about it.
If you can’t get together with the owner on a purchase, at least you will be armed with information that you can use to your advantage in dealing with the lender. Lenders often have no hope of making back all their losses on a sale. The law of supply and demand dictates a business decision to cut their losses, so one can often get a fine bargain in such a situation.
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