Lehigh Valley Real Estate Blog, Home Buying & Selling Information

Lehigh Valley Foreclosure Properties - What Can a Home Buyer Expect?

 
Can you find me a good deal on a Lehigh Valley Foreclosure Property is the common request from many home buyers these days.

A lot of Home Buyers are first time home buyers or buyers who purchased during a different market. Do they know what they are getting into when pursuing a foreclosure property?

Unlike a property that is being sold by a home seller with equity and the motivation to sell, foreclosure properties can bring on unforeseen costs.

- The home is being sold as-is.

- The original home owner is not available to ask about "water in the basement" or "what does heat cost per year"

- The utilities are typically turned off (more on this later in a future blog).

- The bank expects you will close on the specified date and will charge you a per diem per day if it doesn't close.

Foreclosure properties range from diamonds in the rough (paint and carpeting) to tear it down and start-over. Some of the problems are caused by mother nature (the owner moved out but didn't turn off the water when it was 10 degrees outside) to the owner got mad and decided to strip everything out of the home or destroy parts of it.

Always go into the basement of a foreclosure property to make sure that the main plumbing system is intact. Copper became a commidity to owners and vandalism over the past few years.

For more information about Lehigh Valley Real Estate visit: www.lehighvalleyhomesonline.com

FHA Will Allow Mortgage Insurance on Properties Owned Less Than 3 Months

 
HUD (Department of Housing and Urban Development) has announced that on February 1st, 2010, they will allow the FHA to Relax the Rule Restricting Mortgage Insurance on homes owned by the home seller less than 90 days.

This new ruling will allow Lehigh Valley Home Buyers to purchase properties they may not have been able to purchase in the past.

The past restrictions would not allow mortgage insurance on a home that was being sold within 90 days of being purchased.

In other words, if an investor purchased a property, remodeled it, then put it back on the market in 50 days, an FHA Mortgage could not be obtained on the property. The seller had not owned the property longer than the FHA requirement of 90 days.

The above scenario allows the house to be on the market for 40 days and possibly sold before the FHA Home Buyer could even qualify for the mortgage.

The new ruling should also attract Lehigh Valley Property Investors who wish to purchase rehab houses, clean them/fix them up, then quickly sell the home. It allows more home buyers in the market during a shorter turn-around time.

The full text of the waiver is on www.hud.gov

To Flip or Not To Flip, That is the Question

Is it better to flip or rent a house in the current Lehigh Valley Real Estate Market?

When housing was at its peak people were buying and selling homes like crazy. Many people were buying, fixing and selling, a process that became known as flipping. The current real estate market is, without a doubt, a buyer’s market. This is a time where homes are more affordable than they have been in years and if people are able to secure financing there are many bargains to be had. That being said is this a good time to flip in the Lehigh Valley?

Flipping is great if you can turn a profit but in today’s market how big will your profit be? Many people who are investing in real estate who may have been flippers a few years ago are now becoming landlords. Buying a house, fixing it up and renting it is covering their mortgage cost, possibly putting a little money in their pockets and allowing them to hold off on selling until the market picks back up.

In 3, 5 or even 8 years, the home that the Lehigh Valley Investor has bought, fixed up and rented out will sell for more than it will today and the investment will pay out that much more, especially if it has been cash flowing the entire time that it was rented.

Flipping an Allentown, Bethlehem, or Easton home (or any of the surrounding areas of Lehigh Valley) makes sense if an investor will turn a profit but right now being a landlord may pay out even more in the long run.