The majority of homes I’ve sold over the past two years have been banked owned properties (REO) and those properties, or HUD homes, are appealing due to their greatly discounted price. Banked owned properties typically need a large injection of LOVE to get them back up to standards and ready to live in. On the flip side, there are some bank owned homes which are move-in ready and need virtually nothing done to them.

More so on the financial note, personal experiences have shown people, whether be an individual or a family, are being more conservative when it comes to their upcoming purchase. Instead of purchasing at their qualifying limit, buyers are leaning towards staying in a comfort zone as it applies to their payments. The short of the long is: my buyers don’t want to have to work just to live in a house. It’s no longer about keeping up with the Jones but living inside their means so they can have savings and extra spending cash for fun. And who doesn’t like to have fun?

So How Do You Get the Most from a Real Estate Purchase?

Planning. Actualizing gains starts at the very beginning of the home buying process. It is not earth shattering news that residential real estate prices are the lowest they have been in many years. In addition, the near future we will not see external forces exploding home values at a massive 20% monthly increase – those increases will likely never happen again.

During the pre-qaulification process ask the loan officer for a payment breakdown for a variety of pricing points and take some time to determine your individual/family’s comfort level. If the monthly payment comfort zone is in $ 1,000 – $ 1,100 range and (based on credit, debt levels, and other factors) then look at homes that fit the range. There are many great buys in the $ 120 – $ 160k range that qualify for zero loans which can significant reduce the impact of purchasing. So what you’re paying in rent is what you’ll be in paying in a house payment.

Payment Worksheet Base on Purchase Price & APR

Information based on a 3.5% down FHA Home Loan as of 10/14/2011.

Information based on a USDA Home Loan as of 10/14/2011.

The gains comes from more than just purchasing a tangible asset at a greatly discounted price yet more so on the savings from borrowing cheap money, reducing monthly housing expenses, and building equity which can be used for future a purchase. We all need to a place to live; why not make it as enjoyable as possible by owning your own piece of property.

Another key factor in gaining the most from a real estate purchase is Time. Days are gone when the average home buyer could buy a home and flip it into a large gain and/or a larger more luxurious home. Staying in a home more than 5 years give the home owner the best chance of building equity in their home – just don’t take out a line of credit on the home. In rare cases, people retire in their home and actually pay off a 30 year home loan like the previous owners of our Hilton Lake listing.

Related posts:

1. Buy a Home if You Make $ 15 Hour with Zero Money Down
2. The Residential Purchase & Sale Agreement
3. When Will the Real Estate Market Stabilize?
4. Financing for Manufactured Homes
5. Has the Snohomish County Real Estate Market Hit Bottom?