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help you get the home ready to sell,” says Combs. “That means cleaning, de-cluttering, staging and painting.” If a homeowner doesn’t feel comfortable staging a home on his or her own, a professional home stager can be hired. Accredited staging professionals (ASPs) can be found by searching the Association of Home Staging Professionals’ Web site by ZIP code or address.
Buyers’ Assistance
Although the financial crisis has led to a decrease in the number of programs that can assist homebuyers, it doesn’t mean that all help has dried up. Credible, well-known programs like the Federal Housing Administration (FHA) are still enabling low to moderate-income families qualify for a loan. The program currently claims 4.8 million insured single-family mortgages. FHA does not issue loans directly to consumers but rather insures loans made by private lenders, protecting those lenders from losses. FHA-insured loans include the following benefits:
• FHA-insured loans require a 3 percent downpayment, which is significantly less than conventional loans require.
• More flexibility on the borrower’s credit rating.
• More flexibility on the source of a buyer’s downpayment—this can include gifts, donations from nonprofits and contributions from employers.
• Borrower may carry more debt than a private mortgage insurer may allow.
Buying a Foreclosure
With foreclosure rates so high, there are a number of foreclosed homes on the market for sale. Homebuyers may be tempted to look into these opportunities, but this option presents a unique set of challenges and considerations. “You have to be careful when buying foreclosures,” says Combs. “It can be a slow, unnerving process.” Combs believes that homebuyers who are new to an area and need to buy a home quickly can become enticed by the thought of buying a foreclosure, but she warns that the process can take months. “The seller of a foreclosure sometimes doesn’t know anything about the house, and there’s usually no guarantee or warranty involved,” she adds.
Furthermore, foreclosed homes can often have property damage of some sort, and may be selling for more than they are worth. “Seldom is a foreclosed home as good a buy as a house bought from a motivated seller,” says Woods. “Sometimes the home is overpriced, the property has been abused, or there are some major defects that need tending to.” Defects can include mold problems, damaged ceilings or roofs, or other serious dilapidation that the previous owner could not afford to address. “Banks usually want these things off their books, and they are usually looking to sell for cash,” adds Woods. Also, buyers may find the process of buying a foreclosed property gets hung up because of an illegal foreclosure proceeding. “Just when you go to close, an attorney steps in and says there was a mistake,” says Woods. For more information, see “Investing in Foreclosed Real Estate.”
The financial crisis in the U.S. has certainly had a huge effect on the housing market and home-buying process, but potential homebuyers shouldn’t assume that loans are not available. Now is as good a time as any to get pre-approval and start shopping while home prices are down and inventory is up.
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Text by Benjamin Hardy
© 2009 BobVila.com
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