http://www.trulia.com/voices/Home_Buying/My_sister_and_I_are_looking_to_buy_a_home_as_st_ti-39136We have seen one for $184,000 but no nothing about foreclosures. Is that the asking price or just the remaining price of the loan? How would we go about finding something within our price range?en-ushttp://www.trulia.com/voices/profile/Real_Estate_Pro-91773-199336/http://www.trulia.com/voices/profile/Real_Estate_Pro-91773-199336/Jessica, you have received many answers - some good and some not so good and some who didn't answer your question. The listing price of the property i.e. $184,000 is the price that the bank wants to get for the property. Just as in any other listed price for a "regular" sale, it is the asking price and is ususally negotiable. First of all if you have not already been approved for a loan, that is your first step. Find a REALTOR with whom you are comfortable, stick with that agent and get a referral from your agent to a lender. Get "all of your ducks in a row", qualified for your loan, decide where you want to buy and work closely with your agent to find a property. You did not mention if you and your sister are buying a home together to live in or a house as an investment. Those may be two different properties, even different areas. Sit down with your agent (one who is familiar with the area in which you want to buy) and discuss everything about your desired purchase: area, price range, general size, investment or home, etc. Good luck - real estate is a long term investment. The house you buy today should be a part of your eventual retirement plan.Tue, 21 Jul 2009 17:12:00 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-91773-246143/http://www.trulia.com/voices/profile/Real_Estate_Pro-91773-246143/Jessica: I know you have already received several answers to your question but here is my opinon. In today's market there are a number of properties available for you to look at. Your profile says that you are in San Dimas. What you don't mention is where you are looking to buy. Are you looking to buy in San Dimas or are you willing to go further East - say toward Rancho Cucamonga or Fontana or even up toward Victorville or Apple Valley? Many of the properties available right now are Short Sales. These are properties where the sellers are in trouble - they cannot afford to keep paying their mortgage but the property values have dropped below the amount they owe on the mortgage. Also, you did not say how much you are willing to pay for the property. My office is located in San Dimas. If you have any further questions please feel free to contact me. I'd be happy to help you out.Wed, 11 Jun 2008 17:28:05 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Long_Beach_CA-111486/http://www.trulia.com/voices/profile/Real_Estate_Pro-Long_Beach_CA-111486/Daniel, You are accurate that I have provided this information in some other recent responses. I don’t believe that most people review previous responses to other questions, and I believe the information of previous cycles is pertinent to Jessica’s question. Simply stated, I am not searching for credibility on this site, I am trying to communicate information for the reader to consider as they may. I find it highly unlikely that Jessica or any other reader would have followed your course of action and clicked my name to see my previous responses. I disagree with you assertion that my response did not address the question. The question inquired about whether purchasing a foreclosure would be a good investment. One Realtor responded saying it "is a fabulous time to buy!" As a long time investor, I strongly disagree with such a statement and making it to a novice investor borders on recklessness. As self stated “first time buyers”, Jessica and her sister are likely not aware of the prolonged nature of real estate cycles and the economic risk of making an “investment” at this time. A lot of novice investors have already been bankrupt and lost homes in this collapsing real estate market. If they are going to make this purchase, Jessica and her sister should understand the risks associated with an “investment” in a protracted down cycle and be prepared for such. It is NOT always a good time to invest in real estate. Best of Luck, NewportFijiFri, 06 Jun 2008 13:33:27 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Woodinville_WA-164044/http://www.trulia.com/voices/profile/Real_Estate_Pro-Woodinville_WA-164044/Jessica, You ask good questions and many of the Realtors below have provided some good answers below. They are good places to begin your research. Newportfiji, Why do you continue to "cut and paste" the same answer to everybody's question? I think you lose credibility when someone can click on your name, and then view your responses to questions and see the same answer being provided to nearly every question. Your response in this instance does not even address the question posed by Jessica. I applaud your desire to educate the public with your statistical references, but I question the appropriateness here, as well as wonder what your ultimate agenda may be? -DanielFri, 06 Jun 2008 12:07:52 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Long_Beach_CA-111486/http://www.trulia.com/voices/profile/Real_Estate_Pro-Long_Beach_CA-111486/Don't waste your time asking Realtors about price trends, investing in real estate or if it is a good time to buy. It was Realtors who were spouting off two years ago that "it was a great time to buy" and "prices never go down." We all know how foolish that advice was. According to Realtors, every day during the past 100 years was a great time to buy OR sell real estate -- and remarkably the same will hold true for the next 100 years. Realtors may be knowledgeable on current and past prices for their area, but they are NOT experts on future price trends. Realtors are NOT economists and very few have any business or economic training to speak of. They are SALESPEOPLE. The reality is that they only get a commission if you buy, so they have an incentive to be less then accurate as to their assessments. The few competent Realtors with integrity would admit that prices are going down and most buyers could save money by simply waiting for the bubble to further deflate. Apart from a few “the world is flat” realtors, everyone realizes that prices are falling. Those that are expecting a quick turn around from this bubble are dreaming. The last cycle took about 11 years to reach peaking pricing from the previous peak. Here are your Los Angeles County vanilla medians between 1989 and 2000: http://www.laalmanac.com/economy/ec37.htm 1989: $214,831 2000: $215,900 Pretty amazing, someone who purchased the “median home” for 214,831 sold for 215,900 11 years later. However, this bubble appears even larger that the 1989 run up, as depicted in the following graph: http://latimesblogs.latimes.com/laland/2008/04/where-we-stand.html . Granted prices are falling faster, so perhaps we can reach a bottom faster. In my opinion this would generally be a terrible time to purchase. All leading indicators are pointing in the same direction as to the Los Angeles market, (i) inventory has increased, (ii) sales transaction volume has slowed dramatically, (iii) lending standards have tightened (pulling thousands of potential buyers from the market), (iv) notices of defaults and foreclosures are at records levels, (v) the economy is slowing (looking more and more like a recession), (vi) literally thousands of high paying mortgage and other real estate related jobs have been lost in southern California over the past year and (vii) the mania which surrounded the real estate market a few years ago has been replaced by a conservative caution steering people to other investment classes. All of these things will put downward pressure on pricing for some time to come. The reality is that residential prices will almost certainly be lower later this year, likely lower in 2009 and possibly even lower in 2010. Real estate cycles take many years to play out and we are at the early stages of a down cycle. Best of Luck, NewportFijiFri, 06 Jun 2008 11:48:20 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Fairfax_VA-115570/http://www.trulia.com/voices/profile/Real_Estate_Pro-Fairfax_VA-115570/Foreclosures may or may not be good investments. I'm working with an investor right now who is pursuing foreclosures or short sales in a suburb of Washington, D.C. He asked me about a particular property. I ran the comps, and included some analysis. Read it carefully. Market conditions, of course, vary neighborhood by neighborhood. But you'll see that in any market, particularly a declining one, foreclosures can be as bad as any other purchase: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I ran a report just of the "solds" and under contracts, but took it back a year to look at trends. And there's a very clear trend downward. In brief, those properties were selling for $245,000-$260,000 (when you factor in seller subsidies) back in the summer of 2007. In fact, some people were actually paying over the listed price in order to build in the subsidies. Those numbers declined. By December, they were selling for about $180,000. And today, including seller subsidies, they're selling for $133,000-$140,000. A couple of examples: On June 25, 2007, [property 1 address] (listed for $259,900) sold for $260,000 with a $15,000 seller subsidy...so, really, for $245,000. On April 23, 2008, [property 1 address] (listed for $159,900) sold for $150,000 with a $4,291 seller subsidy...so, really, for $145,700. That's a price drop of $99,300 in 10 months. Another example: On September 13, 2007, [property 2 address] (listed for $254,990) sold for $248,000 with a $9,920 seller subsidy...so, really, for $238,080. On June 2, 2008, [property 2 address] (listed for $145,000) sold for $140,000 with a $7,000 seller subsidy...so, really, for $133,000. That's a price drop of $105,000 in 8 months. Those two are pretty typical. Prices are dropping $10,000-$12,000 a month in that subdivision. And recognize that properties can take a while to close. So, if the lender or seller agreed to accept $133,000 for a sale that closed on June 2, the agreement probably was reached in late April or very early May. That same house, with a contract put on it a month later, is worth $10,000 less. As the saying goes, you don't want to catch a falling knife. On the other hand, there has to be a bottom somewhere! And prices are getting low enough that some of those properties are cashflowing. And if they cashflow, with a buy and hold strategy, you don't have to buy at the very bottom to end up profitably in the long run. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hope that makes the point that short sales and foreclosures aren't necessarily bargains. One thing I found out later, when researching rentals in the areas, is that an out of state investor had bought a similar property as an REO for $170,000. It must have looked like a good bargain at the time, since the previous sale had been around $270,000. Now it's worth $140,000. Meanwhile, that out of town investor had been trying to rent the property out--priced a bit high--for about 6 months. It's been withdrawn from the market, and my guess will be back on as a short sale. And I would not recommend foreclosures or preforeclosures (short sales) to first time buyers. It can be very frustrating and time consuming. And, as you've already seen, it can be as financially risky as any other transaction. And, at the end of the day, you may not end up with the property at all. Give it a shot, if you really feel you need to. But there are plenty of bargains out there that aren't foreclosures or preforeclosures. Talk to (and interview) several good Realtors. Ask their opinions. Look: As your agent, they'll do whatever you ask them to, and they'll do it to the best of their ability. But ask them what they'd recommend for your sister and you. Hope that helps.Fri, 06 Jun 2008 08:45:18 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Whittier_CA-241138/http://www.trulia.com/voices/profile/Real_Estate_Pro-Whittier_CA-241138/There are so many other options open for you. I can give you the tools to check on your pc...... and once you see something we can discuss and move forward. I am a owner/ broker/ and state licensed appraiser and know how to value properties so you can make a much more educated decision.Fri, 06 Jun 2008 08:11:39 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-California-245492/http://www.trulia.com/voices/profile/Real_Estate_Pro-California-245492/Jessica: When people, including realtors, talk about Foreclosure Properties, they are generally talking about properties which have been foreclosed on by the bank and are now REOs (real estate owned by the bank). These are often great investments, although not always. So it highly recommended that you work with a good real estate agent who can tell you what comparable properties are selling for and help you make an informed decision. You need to take into consideration that with most REO's you will not get the seller's standard disclosures about the condition of the property (because the bank does not know what broke last year or what was patched together earlier this year) and you will most probably be buying the home "as is" meaning the bank will not do any repairs. Still, with a little elbow grease, some paint, and a good carpet guy, you can usually come out ahead if you buy an REO. When you look at foreclosures on Trulia, what you are seeing are properties which are in pre-foreclosure, as reported by RealtyTrac. This means that one or more lenders have filed a notice of default (NOD) against the owner, but does NOT necessarily mean that the property is for sale. The home owner has as much as 111 days to bring his loan current or sell the home. Many home owners wait until the last minute to even consider selling, or they realize early on that they owe more than the current value of the home and simply let it go back to the bank (hence the increasing numbers of REO listings). The property that you saw for $184,000 may have additional loans and tax liens against it, as well as possible judgment liens and mechanic's liens. If you want to play in the pre-foreclosure market you really need to know what you are doing. Even seasoned investors have gotten in over their heads on these deals. I worked the pre-foreclosure market for the past 4.5 years and can tell you about great deals and successes and I also have some horror stories. As a first time homebuyer, you probably want to steer clear of these, as they do require you to have ready cash (to cure the default) and to have a good knowledge of real estate (to avoid buying a property that will cost you more than it is worth.) Feel free to contact me if you want more information. Best of luck in finding a great home for a great price and Dare to Dream. Shel-lee Davis Real Estate Consultant RE/MAX Palos Verdes RealtyMon, 02 Jun 2008 14:52:31 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Long_Beach_Signal_Hill_Lakewood-102572/http://www.trulia.com/voices/profile/Real_Estate_Pro-Long_Beach_Signal_Hill_Lakewood-102572/Hi Jessica, A property is a good investment for serveral reasons. The fact that a property is in foreclosure does NOT guarantee that it is a good investment, though it may well be. Now is a fabulous time to buy! You need to hook up with a good local Realtor. Start interviewing all your contacts that have bought or sold a home in the last year. When you have 3 names of Realtors your friends have raved about, interview them individually. When you find someone you feel comfortable with, they will set you up with a lender & help you to make that purchase. Karen MillerMon, 02 Jun 2008 14:45:25 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-Irvine_CA-77575/http://www.trulia.com/voices/profile/Real_Estate_Pro-Irvine_CA-77575/Hi there Jesscia. Foreclosures and short sales are generally good for investment. Buying them can be complicated and you should really work with an experienced professional who can guide you throught this process ands help you get the best deals out there. If you would access to all the best Foreclosues in Orange and La County please let me know Kind Regards Michael Barron First Team Real Estate (714) 552-6817Mon, 02 Jun 2008 13:19:00 -0700http://www.trulia.com/voices/profile/Real_Estate_Pro-95945-235603/http://www.trulia.com/voices/profile/Real_Estate_Pro-95945-235603/A foreclosure is a great investment! As a first time home buyer however, the process is a little more complicated and time consuming than a regular home sale. Find a good Realtor in your area who will have access to all the listings, and they can let you know if there are any foreclosures that are listed, and if they think it's a good investment. They will know the market in your area and have a good idea if an individual foreclosure is a good value, or not.Mon, 02 Jun 2008 11:46:43 -0700