Today, there are more bank owned properties than ever in most places. The process whereby a house becomes a bank owned property is a fairly simple one. Once a home is foreclosed and auctioned, if the auction price doesn’t meet the minimum bid the bank will buy the home.

Bank owned properties offer several potential benefits to buyers. First and most important is, of course, the price. A bank owned property will usually be priced lower, and sometimes a great deal lower, than a property sold by a traditional seller. In addition, buying a bank-owned property creates a situation with less risk than, let’s say, buying a home at auction.

Still, there are some things you need to watch out for when it comes to bank owned properties. For example, you can’t negotiate the price based on the condition of the home. In some cases, the former tenants or owners may have been destructive with the property before they left, or vandalism may have occurred in the interim.

You can choose to make your offer for a bank owned property contingent on things like an inspection, sale of your current home, financing, and an appraisal. Understand, however, that if there are several offers the ones that have the fewest of these kinds of contingencies will probably rise to the top of the consideration. You need to balance the risks against the necessary contingencies.

If you’re in the market for a new home, bank owned properties may be a good option for you to consider.  A convenient service for Michigan homebuyers can be found at AccessHomeListings.com.  Potential homebuyers can get FREE 24/7 “mobile” access to real-time MLS property information. Check it out!

The recent economic downturn and subsequent efforts by government to loosen up the credit crunch have created a truly unique environment when it comes to home prices. In many places, housing prices have dropped dramatically. According to one study by Fiserv Lending Solutions the national media home price is down as much as 26% since home prices peaked in 2006. In some places, like Michigan, prices have dropped even more drastically by as much as 40% - 50% or more.

Homes are selling in places that foreclosures are rampant, such as states like Arizona, California, Florida and Nevada. In the last quarter of 2008, almost half of all home sales fell into the “distressed” category, meaning that they were either foreclosures or short sales. As more and more foreclosures hit the market, traditional sellers have had to cut their prices in order to keep up.

This is, in many ways, a buyer’s market. You can make low home prices work for you, if you know where to look. Finding the right bank owned home or finding a home where the seller is asking for less than they owe on their mortgage may get you a very good deal on a home.

There’s another way you can make low home prices work for you, however. You can use the low home prices from short sales and from foreclosures to add pressure when making an offer on a home. Traditional sellers know that they have to compete with these homes, and may be willing to give a lot more in their negotiations than they would have just a couple of years ago.

By studying your local market and exploring all of the available options, you can make these low home prices work for you. You may be able to find the ideal home for your family, and to find it at a much lower price than you’d have hoped for.

If you’re thinking about becoming a first time home buyer, you might be anxious to try to take advantage of the deflating real estate bubble that’s being talked about so much these days. While it’s true that there are many opportunities for first time home buyers right now, there are some important factors that you really need to consider before you take the plunge into home ownership.

Here are some things for potential first time home buyers to think about:

You’ll probably need a more sizable down payment. The days of “Zero Down” and “No Cash to Close” are virtually gone.  The are still a few loan programs that allow Zero Down, like a Veteran’s VA loan or Rurual Development.  However, special qualifications are required for these programs.  In most cases you can expect to put at least 3.5% down with FHA financing or 10% with Conventional financing.  To further minimize needed cash to close, the purchase offer should be structured properly to help offset additional monies needed for closing costs, prepaid taxes and insurance, as well as escrows.

Mortgage Underwriters are also far more picky. This “credit crunch” everyone has been talking about is a reality. Lenders are looking closer than ever at things like employment history, proof of income, source of funds, credit history, and of course, the condition and value of the home itself.

Even though home prices may continue to slide, no one is sure when prices are going to stop falling.  The bottom is best seen once your well past it.  It’s possible you may find that the ten percent you put down on a new home may be eroded (in the short term) by a continued drop in home values, perhaps even leaving you owing more than what the home is worth.

Eventually, home prices will come back up, but you should still make sure that you’re interested in this home for the long haul.  Historically, first time home buyers tend to move on to another home rather quickly.  Just make sure the home you buy can support your family’s growth for at least a few years to come.

If you’re considering the purchase of a home, I encourage you to connect with my team and I do a brief pre-approval to help make sure your goals, timing, and financial affairs are all aligned.  Proper preperation and guidance early on in the home buying process can ultimately save you time, money and frustration.