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Posts Tagged property

First Time Home Buyer

Although it may seem counter-intuitive, I believe that now is an excellent time for first time home buyers in Dallas to enter the market. Many entry level homes are available at great prices in Dallas, especially if you are a first time home buyer that can do a few repairs. The number of foreclosure properties in Dallas is increasing, but these properties frequently come with a few warts. Given that the last occupant could not afford the mortgage, it is likely that they could not afford to keep up with repairs either. However, with a little TLC, Dallas homes can be spectacular again. They are all at a discount price for first time home buyers in Dallas.

Dream House Sketch

Live Your Dreams!!

So how do you go about buying a home in Dallas as a first time home buyer? How do you know if you are getting a good deal? How do you get it financed? How does the closing process actually work? How do I obtain good advice when being a first time home buyer? All of these are great questions, and the answer to most of them is “don’t do what I did when I was a first time home buyer in Dallas.” Here’s my story…

Young and relatively new to Dallas, I was ready to be a first time home buyer. A US Navy officer at the time, I knew that I could obtain financing through the VA and have little out of pocket cost. I walked into a local real estate office in and announced that I was ready to be a first time home buyer in Dallas. I was soon signing a long term representation agreement with an agent that turned out not to know very much. It was up to me to figure things out, and I made some rather large mistakes (bought a house about 300 yards from the Dallas county line. Had I crossed over the line, taxes and car insurance would have been significantly cheaper).

So here are my recommendations to any first time home buyers . First, work with a seasoned agent or broker that has years rather than minutes of experience about Dallas real estate. Get to know them before signing a long term agreement, and then only sign an agreement if you have a way out. Don’t get yourself tied up for six months. Good agents will always have clauses that will release you from the agreement. Also, if you are a first time home buyer in Dallas make sure that you really trust the person you are working with. Watch the way that they present information and ask questions until you can determine whether or not they seem knowledgeable and trustworthy. If you can get a reference from a friend, do so. If the references you use are provided by the agent, ask them hard questions.

Second, if you are a first time home buyer in Dallas get yourself qualified for a mortgage before you start a serious search. This will let you know what you can afford. No sense looking at $750,000 homes if you only qualify for a $200,000 mortgage as a first time home buyer. When it comes time to make an offer, you are going to have to prove to the seller that you can obtain financing before they will accept the offer. Going through the qualification process early as a first time home buyer in Dallas will help throughout the process.

Finally, think about the things that are really important to your life, and find a home near them. Being a first time home buyer, I purchased in the outer Dallas suburbs, but my life never moved out there. All of our friends and social events were in Dallas. Being a first time home buyer, I could have afforded to pay a higher mortgage in exchange for the fuel and wear and tear that I put on my cars.

The Foreclosure Process

Foreclosure Notice

Foreclosure - Bargain Opportunity??

There’s a lot of talk regarding the purchase of foreclosure properties in the news right now, but exactly what does it take to purchase a foreclosure property? And how does this process differ from just buying a house that is listed for sale through a real estate company? This post will explain some of the basics behind the foreclosure process, and the risk/reward associated with purchasing in each phase.

Pre-foreclosure

This is the first phase of the foreclosure process. This period begins as the lender sends a Notice of Default to the homeowner. This is a legal document that informs the home owner that they are in default of the terms of their loan agreement and that the lender may elect to pursue foreclosure. At least 60 days must pass between this notice and the event where a public auction for the property is held. The Notice of Default is a legal, filed document and is accessible through public records search.

The Notice of Default is followed by a legal document called a Lis Pendens. This is the legal filing of the lender’s intent to foreclose. This is the point in the process where the government has recently contemplated placing a 90 day delay in the foreclosure process to allow the homeowner to recover before the foreclosure process continues. Again, this document must be filed and is available through public records search.

During the period of Pre-foreclosure, you must deal directly with the home owner (or their real estate agent). It is during this period that a “short sale” may occur. A short sale is the sale of the property for a price less than what is owed to the lender. The lender must approve the short sale, and although a cumbersome process, it can lead to the purchase of the property at a great price.

Foreclosure

If the homeowner is unable to reach agreement with the lender for either a restructured loan or a short sale, the next step in the process is Foreclosure, which begins with a public auction. The property is held for auction on the “courthouse steps” on the first Tuesday of the month. This is a sealed bid auction process, and the property is sold to the highest bidder. The lender will usually submit a bid for the amount still owed on the mortgage, and is frequently the highest bidder.

This can be a great event for someone to purchase a property at a highly discounted price, but comes with significant risk. In most cases, access to the interior of the property is not possible, which greatly limits the buyer’s inspection of the property prior to purchase. This is also a cash sale, so unless you are able to write a check for the property, it may not be a feasible purchase point.

Post Foreclosure

Following the auction, the lender frequently walks away with the property. The lender will then take the property to market, frequently through a real estate broker. In the MLS system, these properties are noted as foreclosure sales. The purchase of these properties works very much like the purchase of any other property for sale in the MLS, with a couple of distinct exceptions. First, these properties are usually sold on an “As Is” basis, meaning that no repairs are performed by the Seller (now the lender). Also, since the Seller has never occupied the home, it is impossible for them to provide an accurate disclosure about the properties history, so they don’t. It becomes incumbent on the Buyer to have the property inspected to determine it condition, and to make an offer appropriate to the physical condition of the property.

Buying foreclosure property can be a great way to obtain a home that has instant equity, but there are a number of heightened risks along the way. I strongly encourage you to seek the opinions of professionals in this process, it will make the whole process much easier, and the final outcome much more pleasurable.