Can You Buy Cheaper Than You Can Rent?
Imagine buying a house for just $6,900. And all this house needed was a paint job, new carpets and a new water heater. Someone did find that great deal in Detroit, but don't expect to be that lucky elsewhere.
But, you can easily find homes that will cost you about $300 in principal and interest. Is that lower than your rent? They exist in many of the areas hard-hit by foreclosures and some of them are great places to live in - Florida, Arizona, and Nevada.
Foreclosure deals and short sales for $60,000 to $70,000 can be found throughout the sunbelt except California, which did not fall as low. For example near Miami, FL, in Homestead a home that sold for $242,000 in August 2006 can be bought for $70,000 today.
Why so low? South Florida has more than 90,000 foreclosures in Miami-Dade, Broward and Monroe counties. All have great weather and you can find some great neighborhoods. The key will be finding a job so you can afford to live there, but if you're already there and renting, start house hunting. You'll probably find you can find a deal that will cost you less than your apartment. And remember, you get those tax breaks too. Any interest you pay on your home is tax deductible, along with the real estate taxes you pay.
If you're a first time buyer you may even be able to get help toward that down payment.
The $8,000 tax credit for first time home buyers ends Dec. 1, so you have to move quickly if you want to take advantage of that credit. Most loans take 30 to 45 days to close, so you've got to move fast.
If you want to find a good deal quickly, I highly recommend that you work with a local real estate agent who specializes in foreclosures. You'll find lots of pitfalls when purchasing foreclosures so seek out a professional. Some problems to avoid:
- Most foreclosures need some work because people who lost their homes left the homes in anger. Some need more work than others. Be careful and take an inspector with you when you look at the home.
- Many investors scoop up the best buys with cash. Lower priced cash deals are winning out over higher priced deals that require getting a mortgage So be patient and realize that you may need to make offers on several properties before you get one accepted.
- Check out any liens that may be on the property.
- If you're buying a home in a condo or homeowners association, check out the health of the association. Associations with a lot of foreclosures may be putting off work or be getting ready to raise monthly fees to cover the fees not being paid by the owners of the foreclosed homes.
You'll find some great deals, but do be careful because you can get badly burned. Be ready for some frustration, but in the end if you can find that perfect house at a great price it will be worth the hassle.
Lita Epstein has written more than 25 books including The 250 Questions You Should Ask About Buying Foreclosures.