18 Easy Steps to Buy a Bargain House

What is a "distressed" property? What is "bargain" real estate?

A distressed property is one with a distressed seller. Job loss or transfer, divorce, death, pending foreclosure, and lack of money cause sellers to sell fast for less. Discovering the seller's problem and finding a solution is the key to buying a bargain property. A distressed property may also be a "doghouse," a dump, or a fixer. Owners of "doghouses" are not always distressed sellers.

18 Easy Steps to Buy a Bargain House

1. Get good advice from successful investors. Ask friends and real estate agents for referrals to investors.

2. Create your personal "Investment Journal," like Doghouse to Dollars Workbook: Turn Yucks into Bucks Investor's Guide.

3. Define investment goals: Do you want to buy a home to live in, to fix and sell, or to hold for your future?

4. Get credit reports & scores. Create a file for each credit reporting agency. Take care of any credit issues.

5. Read Real Estate investing books and articles. Attend workshops and seminars. Avoid out of date infomercials on TV.

6. Get good advice from lenders. Choose a lender with great service, good closing record, and fair costs. Arrange financing.

7. Define your target locations: Is your desired property near home or job, vacation or second home?

8. Learn your target market. Study real estate newspaper sections. Pick up homes for sale flyers. Watch sales and note prices, amenities, and conditions. Follow HUD sales in your area.

9. Interview Real Estate agents and learn from them. Do not sign any agreements with agents limiting your search for bargain property. (These contracts make you pay the agent a commission even if you purchase by owner.)

10. Use agents who know local market customs and guarantee to make many offers for you.

11. Find a good escrow officer for buying "for sale by owners."

12. Study home remodeling, design magazines and books. Learn the costs of materials, supplies, and trades. Visit home improvement warehouses. Note costs of building materials.

13. Be ready to know a bargain property when you see it.

14. Make many offers. Bid on HUD repos.

15. Buy only bargain property. Get great terms or concessions from seller.

16. Plan house transformation during escrow. This speeds your work time -- saving you money in holding expenses.

17. Monitor real estate escrow closing. Do not jeopardize your financing by charging up credit cards or making unnecessary purchases.

18. Celebrate buying your "doghouse" with an open house!

(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.

Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see http://www.doghousetodollhousefordollars.com/pages/5/index.htm

AFP - Speculation about the stressed financial health of US mortgage-finance giants Fannie Mae and Freddie Mac swirled Wednesday as their share prices further plummeted.

Reuters - Shares of Fannie Mae and Freddie Mac dove to their lowest levels in more than 18 years on mounting fears of a government bailout that would wipe out shareholders of the two U.S. housing finance giants.

AP - Shares of mortgage finance companies Fannie Mae and Freddie Mac continued their plunge Wednesday as investors are increasingly convinced that the stocks will drop to zero if the government bails out the troubled companies.

AP - Mortgage application volume fell last week to its lowest levels in nearly eight years, the Mortgage Bankers Association said Wednesday.

Reuters - A growing number of U.S. adults are struggling to pay their medical bills, tapping into savings accounts, home equity and credit cards to cover health care costs, according to a survey released on Wednesday.

Reuters - Most Americans think that the worst of the fuel price spike that pushed gasoline above $4 per gallon has passed, but they have little hope that the housing market will stage a swift recovery, according to a Reuters/Zogby poll released on Wednesday.

AP - As mortgage financiers Fannie Mae and Freddie Mac struggle with continuing credit losses, their ability to raise needed capital is uncertain and, analysts say, is complicated by the possibility of a government bailout of the two companies.

AP - California homebuyers sprung to life in July, pouncing on foreclosed homes and deeply discounted properties but largely ignoring pricier homes that have been languishing on the market, a research firm said Tuesday.

AFP - The euro rebounded from six-month lows against the dollar after a spike in inflation and weak US housing market figures stoked fresh concerns about the US economy.

Reuters - U.S. wholesale prices shot up in July at the fastest annual rate in 27 years, while home builders cut back on construction as they worked through a glut of unsold homes, government data showed on Tuesday.

AFP - Investments in the bonds of struggling US home-loan financers Fannie Mae and Freddie Mac have earned Russia more than a billion dollars in the past six months, press reports said Tuesday.

AFP - The euro rebounded from six-month lows against the dollar after weak US housing market figures stoked fresh concerns over the outlook for the US economy.

AP - The Home Depot Inc. said Tuesday that its second-quarter profit sank 24 percent and reiterated its downbeat outlook for the year amid a weak housing market that shows no signs of recovery.

AP - Whether or not the government is actually on the verge of taking over mortgage finance companies Fannie Mae and Freddie Mac, investor fears that a bailout is imminent could turn such a worst-case scenario into reality.

AP - In the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job, and (no) assets."

Reuters - Investors dumped shares of Fannie Mae and Freddie Mac on Monday after a newspaper report said government officials may have no choice but to effectively nationalize the U.S. housing finance titans.