Don’t waste your time using a Realtor who is not familiar with selling HUD Homes
Any mistake causes the bid to be rejected. Don’t use an agent who says you must bid way over minimum bid. Find an agent specializing in Department of Housing and Urban Development homes who wants to work with you on your terms. Many bargain HUD (Department of Housing and Urban Development) homes do sell for far more than the minimum bid. Hold out for the one property which doesn’t get way overbid. I bid about $40,000 under minimum on our second home owner-occupant mountain cabin.
We submit many bids and win enough to make it pay us well. The Department of Housing and Urban Development only allows one foreclosure home purchase as an owner-occupant every two years from the date of closing.
Rely on your gut instinct and don’t let your real estate agent unduly influence you. It is not a difficult process for your agent to make a computer bid. You need an agent willing to make a few bids to get a successful bid. This is like winning a lottery, with the odds in your favor.
Bids must have a lender’s loan commitment statement. Lenders unfamiliar with HUD requirements also waste your time. Any mistake causes you to lose the purchase. Not all lenders understand the Department of Housing and Urban Development’s bid, finance, and purchase process.
When placing a bid on a HUD homes, raise your offering bid to cover some of your closing costs. This means you get the Department of Housing and Urban Development to pay your closing costs and save out-of-pocket expenses. Also, the higher sales price impacts the market comparable sales in your favor for sale later. Your purchase price influences the values of the market area. Keeping prices higher for active sales during your renovation time protects your investment potential.
Don’t get attached to one particular property. We placed a bid on a home I loved in Apple Valley and lost it by a few hundred dollars. The house came back on the list later, not at all uncommon for Department of Housing and Urban Development repos. But, by this time, we had already purchased a better distressed property.
To make a good profit in real estate, you must buy right. Check out all property types available to find the best transaction for your specific situation. Consider fixers, distressed sales, repossessions, multiple listings, for sale by owners, and vacant properties just wasting away.
Baltimore City is officially divided into nine geographical regions: Northern, Northwestern, Northeastern, Western, Central, Eastern, Southern, Southwestern, and Southeastern, with each patrolled by a respective Baltimore Police Department district. However, it is not uncommon for locals to divide the city simply by East or West Baltimore, using Charles Street or I-83 as a dividing line, and/or into North and South using Baltimore Street as a dividing line.
The Central region of the city is the Downtown area and location of Baltimore’s main commercial area. Home to Harbor place, The Camden Yards Sports Complex (Oriole Park at Camden Yards and M&T Bank Stadium), the Convention Center, and the National Aquarium in Baltimore, the area also includes many nightclubs, bars and restaurants, shopping centers and various other attractions. It is also serves as the home to many of Baltimore’s key business such as Legg Mason and Constellation Energy. In addition, the University of Maryland, Baltimore campus is housed in this area, with the long-associated University of Maryland Medical Center adjacent to the school. The area, especially in the downtown core, has mainly served as a commercial district with limited residential opportunities. However since 2002 the population in Baltimore City is losing 10,000 residents with a projection of 7,000 additional resident moving out per year by 2012.
The Northern region of Baltimore city lies directly north of the Central region and is bounded on the East by The Alameda and on the West by Pimlico Road is a suburban residential area home to many of the city’s upper class residents in neighborhoods such as the Roland Park-Homeland-Guilford-Cedarcroft area. The Northern region is home to many of Baltimore’s notable universities such as Loyola College, The Johns Hopkins University and College of Notre Dame of Maryland.
The Southern Region of Baltimore city, a mixed industrial and residential area, consists of the area of the city below the Inner Harbor east of the B&O railroad tracks. It is a mixed socio-economic region consisting of working class ethnically mixed neighborhoods such as Locust Point; the recently gentrified Federal Hill area, home to many working professionals, pubs and restaurants; and low-income residential areas such as Cherry Hill.
The Eastern part of Baltimore city consists of the Northeastern, Eastern, and Southeastern regions of the city. Northeastern Baltimore is primarily a residential neighborhood home to Morgan State University bounded by the city line on its Northern and Eastern boundaries, Sinclair Lane, Erdman Avenue, and Pulaski Highway on its southern boundaries and The Alameda on its western boundaries. It has undergone demographic shifts over many years and remains a diverse but predominantly African American region of the city.
The Eastern region is the heart of what is considered “East Baltimore” and is home to Johns Hopkins Hospital. Located below Erdman Avenue and Sinclair Lane above Orleans Street, it is almost an exclusively African American area home to low-income residential neighborhoods, several of which constitute many of Baltimore’s high crime areas.
The Southeastern region of the city is located below Orleans Street bordering the Inner Harbor on its western boundary,the city line on its eastern boundaries and the Baltimore harbor on its southern boundaries is a mixed industrial and residential area. Home to many young professionals and working class people, it is an ethnically rich section of Baltimore home to many Polish Americans, Greek Americans, African Americans, and Italian Americans. Upper Fells Point is the center of the city’s steadily growing Latino population.
The Western part of the city consists of the Northwestern, Western, and Southwestern regions of Baltimore. The Northwestern region of the city bounded by the county line on its northern and western boundaries, Gwynns Falls Parkway on the south and Pimlico Road on the East is a predominantly residential area home to Pimlico Race Course, Sinai Hospital and several of Baltimore’s Synagogues. Once the center of Baltimore’s Jewish community, it has undergone white flight since the 1960s and has become an almost exclusively African American area. It is home to many suburban residential areas primarily located above Northern Parkway and several lower-income areas below Northern parkway.
The Western region of the city located west of downtown is the heart of “West Baltimore” bounded by Gwynns Falls Parkway, Fremont Avenue, and Baltimore Street. Home to Coppin State University and Pennsylvania Avenue, it has been the center of Baltimore’s African American culture for years home to many of the city’s historical African American neighborhoods and landmarks.
Once home to many middle to upper class African Americans, over the years, the more affluent African American residents have since left migrating to other sections of the city in addition to areas such as Randallstown and Owings Mills in Baltimore County and Columbia in Howard County. The area now constitutes a deprived socio-economic group of African American residents and like “East Baltimore”, it is known for its high crime rates. Television series, such as The Wire, that concern themselves with Baltimore’s crime problems have been based on events that took place in West Baltimore.
The Southwestern region of Baltimore city is bounded by Baltimore County to the west, Baltimore Street to the north, and downtown and the B&O railroad to the east. A mixed industrial and residential area, it has gradually shifted from having a predominantly White to a predominantly African American majority.
Distressed Properties Homes
The difference between a fixer and a distressed property. Distressed properties may be fixers or just unwanted houses. Divorce, job loss or transfer, death, financial difficulty, and other problems often force a sale for less than market value. Just because an owner’s problem causes a distressed sale does not mean the house requires fixing.
Repossessed Homes market is hot.
for great bargain properties for sale by the Department of Housing and Urban Development, VA REO, Freddie Mac, Fannie Mae, and Bank-REOs (acronym for real estate owned) in Hollins Market Irvington Morrell Park Pigtown Sowebo Ten Hills • Union Square Violetville Wakefield Washington Village South Brooklyn Cherry Hill Curtis Bay Fairfield Federal Hill Lakeland Locust Point Harborview Mount Winans Pratt Monroe South Baltimore Wagner’s Point Westport Southeast Bayview Brewer’s Hill Butchers Hill Canton Ellwood Park Fells Point Graceland Park Greektown Harbor East Highlandtown Jonestown Kresson Little Italy McElderry Park Patterson Park Perkins Homes O’Donnell Heights St Helena Washington Hill.
Real estate agents try to discourage you from repos and switch you to multiple listed homes. Do not listen to negative remarks about how hard it is to find a good deal property. Find another agent. Even in the hot market at the time of this writing, when the average house sells in less than three weeks, we found two properties for at least forty thousand dollars under market value. Paying a listing service to mail you lists of repossessed properties is a waste of money. Actually, by the time you get these lists, the houses are already sold. Many web sites listing foreclosures thrive on the web for no charge to you.
a flashlight with you to view a repossessed property. With no electrical service and boards covering windows, viewing dark rooms is tough. A good real estate agent will have her own flashlight, but you want to see what you want and not what she wants you to see.
VA REO Home Buying
Cleaner than HUD homes, homes owned by the Veterans Administration are also offered on a bidding system through real estate agents. The VA partially fixes up their repossessed homes. The VA sometimes offers vendee (seller) financing with few processing costs, low interest, and no prepayment penalty. You do not have to be a Veteran to buy these easy to qualify for homes.
As of this writing, the VA has changed the way their homes are offered for sale. This is another reason you need a real estate agent who stays on top of recently revised marketing procedures relating to government-owned properties. Less known government agencies such as Fannie Mae, Freddie Mac, FDIC, SBA, the IRS, and GSA list repossessed properties on their individual web sites. These properties, rarer than Department of Housing and Urban Development and VA, usually get cleaned and repaired before listing with real estate agencies with sale prices closer to market value.
REO’s Buying a Home
Banks often offer their real estate owned REO homes at bargain prices. Depending on the bank’s resale policy, conditions of the property, and available financing, REO opportunities vary widely. Several banks lend on their repos while other banks just want out. Great financing becomes possible through the banks who offer in-house terms. Ask for no points, minimal loan costs, and no prepayment penalties. Check with your local lending institutions and find out how they market their repossessions. Many of these bankers will give you their web page listing available property. Befriend real estate agents who specialize in listing bank-owned repossessions so they will notify you of a new listing immediately.
Multiple Listings It is hard to find a bargain in multiple listings, but not impossible. Check out listings which have been on the market for awhile. Look for vacant houses, as these cost the seller money every month. Make an offer for much less than asking price with a quick escrow. Many anxious sellers jump on an offer if they think they will be out of their problem in only ten days. This is another reason you need a lender and an escrow officer who perform fast.
I follow the multiple listings in our area on the Multiple Listing Service. One of my agents emails me new listings daily. You need an agent who calls you the minute a new distressed property listing becomes available. Under-priced listings mostly get snapped up by the real estate agents and their investors before they hit the market.
Just like making many bids, make many offers. You never know when a seller’s problems reach a critical point causing abrupt action.
For Sale by Owners
Houses for sale by owner may not always be a great buy, but there is always at least one bargain out there. Many investors prefer buying directly from the owner. If you have ever tried to sell your home by yourself, you probably met some of these investors. Cruel, hard, and in some cases, fraudulent investors dream up all kinds of schemes to steal houses from distraught homeowners. Understand that the home seller most likely dealt with these callous investors before you and therefore may view you with suspicion. Earn their trust by working with them honestly and compassionately.
Let honesty and kindness guide your actions with sellers. Finding out the seller’s specific problem is the key to helping them and yourself. Uncover the seller’s particular need and find a solution. Because it is embarrassing for some sellers to let you in on their troubles, extra sympathy and relaxed timing helps you unearth their underlying motivation. Listen carefully, stop talking, and pay attention to details which lead to understanding the real reason they need to sell.
The seller may need a quick escrow, need to rent back the home for a while, or want immediate cash. You could give the seller a loan of cash with a note secured by the property. Ask an attorney about your state laws regarding this type of purchase advance. We offered a seller a $2,000 deposit outside of escrow, which went toward the down payment, to entice a money-hungry seller to commit to our low price.
Many sellers do not need all of their cash out. Owner financing is a great deal for you. Usually, you get a lower interest rate and you don’t have to pay lender’s points or prepayment penalties. Also, these loans typically won’t show on your credit report so you won’t have these payments counted against you. If you have a good credit report, take a copy with you to show to the seller. This prevents more inquiries on your credit history and keeps your credit score from dropping.
Ready Buy a Home
Be prepared to make an offer immediately when you find a bargain. Make sure you are pre-approved with a great lender who can close quickly.
Distressed sellers and fixer houses offer you a great way to get into the real estate investing business.
Baltimore HUD Homes
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