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Home Buyers Should Recognize Opportunity in Foreclosure Homes

While foreclosure rates have continued to skyrocket in the preceding months, first-time home buyers have definitely found reason to rejoice. In the past many homebuyers were reluctant to jump onto the bandwagon and purchase a home in light of prices that seemed to be escalating with no end in sight. As a result, there were many who made the reluctant decision to continue renting rather than taking on an unwieldy mortgage payment. As it turns out, this may have been the best decision they ever made, because for those who can still afford it there has never been a better time to snatch up a deal on the real estate market.

At the end of 2008, the real estate market closed with prices nearing a 25% drop from the preceding year. While it is not yet clear whether the coming year will bring more of the same or whether the economy and the real estate market will finally experience an upturn, many are already snatching up deals.

Although many home sellers have slashed the prices of their homes in order to move them, a large number of first-time home buyers have found incredible deals in the way of foreclosure homes. In some areas, the number of foreclosure homes accounts for at least 50% of the total number of homes for sale on the market, giving home buyers plenty of properties to choose from.

The precise amount of money that can be saved on the purchase of a foreclosure home varies, but it is not unusual for a first-time home buyer to be able to snatch up a home that has been foreclosed and save a significant amount of money. Oftentimes, the sales price depends upon the amount of money that was owed on the home at the time the previous owner defaulted on the mortgage loan. Lenders are in the same boat as homeowners in that they know they must price properties competitively to move them. This is good news for first-time home buyers who are looking to save money.

While a foreclosed home can provide tremendous savings, first-time home buyers are cautioned that such homes are not completely free from problems. In many cases, the home may be in disrepair and the previous owners may have even damaged the home prior to moving out once they realized that foreclosure was inevitable. Certainly, this is not the case in all situations, but it is a possibility that buyers should be aware of.

In order to gain the most protection possible when considering the purchase of a property that has been foreclosed upon, home buyers are encouraged to have the property inspected whenever possible. Not only should they personally tour the property but also have a licensed real estate inspector provide them with a report of any possible problems with the home. In some circumstances this may not be entirely possible, but doing so can certainly help to eliminate a number of risks that might accompany the purchase of a foreclosure.

Beyond the dramatically slashed prices on foreclosure properties, there are also other benefits that are nudging first-time home buyers to step into the market and make a purchase as well. Over the last several months, interest rates have been lowered and may continue to fall in the months to come. There are even some experts who are predicting that by the end of the year, mortgage interest rates could settle around 4%.

Given the low interest rates and the fact that a buyer can easily purchase a home for 50% less than what they would have paid just a few years ago certainly seems to be all the motivation that some home buyers need. Those consumers who have saved money for just this type of opportunity to present itself have suddenly found themselves sitting pretty. Prices are so low in some areas that more than one buyer has been able to purchase a foreclosure home outright for cash while others have been able to make a hefty down payment. You can find many foreclosure homes listing here!

Credit restrictions are still a concern for many and there is no denying the fact that mortgage loans are not as plentiful or as easy to obtain as they once were. Lenders are looking for borrowers with exceptional credit and are not leaving a lot of leeway for prior credit issues. Still, pressure is increasing for lenders to loosen some of the restrictions on lending, which should go a long way to help first-time home buyers even more. You might also want to read Buyers Beware with Foreclosures



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