TEXAS FIVE STAR REALTY

Info@TexasFiveStarRealty.com

 
214-457-7055

 

 

Texas Real Estate Commission Information About Brokerage Services                       Texas Real Estate Commission Consumer Protection Notice

Dallas homes for sale, Plano homes for sale, Frisco homes for sale, Prosper homes for sale, Allen homes for sale, McKinney homes for sale, Murphy homes for sale, Celina homes for sale, homes for sale

Home

About Us Buyers Sellers Investors Commercial Relocation Contact Us Lenders Inspectors Titles
Builders Vendors PlaceHolder
Search Properties
Find Your Home's Value
Local Market Snapshots
Local Real Estate Trends
National Market News
Foreclosure vs. Short Sale
Dallas FW City Directories
Dallas FW School Ratings
Dallas FW City Tax Rates
Estimate Closing Cost
Mortgage Calculator
Mortgage Amortization
Green Tax Credit
Types of Loans
Relocation to Texas
Customers vs Clients
Repair Cost vs Value
Rent vs Buy Calculator
Your First Home?
My Blogs
Testimonials
Test Your R. E Knowledge
  Property Management
Open House Manager Tool

Pay the entire purchase amount in cash vs. getting a loan

Things Buyer Should Know When Purchasing a Foreclosed Property at Auction 

EXECUTIVE SUMMARY:Summary of things a buyer should know in buying a foreclosure REO property

Pay the entire purchase amount in cash, vs. getting a loan:

In most parts, purchasing a property at auction will be different than regular (non-auctioned, non-foreclosed) sales. One of the major differences is that at auction, the winner must pay the entire amount with cash, money order, cashier check immediately after winning the bid at auction. Where as, in regular sale, if they are qualified, they can leverage and get majority of the purchase price (e.g., 90%, 95%, 96.5%, etc) loan with a today’s low interest of 3.5%-4.5%. This is a major cost to the cash purchasers at auction. Loss of leveraging and loss other investment opportunities should be accounted for. This value varies greatly from a purchaser to another purchaser.

The question is that, in view of the purchaser, how much his entire purchase money worth more compare to low down payment and getting the loan.

For Foreclosed REO buying Process from Banks please visit http://www.TexasFiveStarRealty.com/Foreclosure_Things_You_Should_Know.asp

For the most up-to-date list of REOs foreclosure in North Texas please visit http://www.texasfivestarrealty.com/List_of_Foreclosures.asp

DETAILS OF THE DIFFERENCES WHEN PURCHASING A PROPERTY AT AUCTION AND PURCHASING A REGULAR (NON-AUCTIONED) PROPERTY:Details of things a buyer should know in buying a foreclosure REO property
 Disclaimer:
Disclaimer of things a buyer should know in buying a foreclosure REO propertyNot all points specified here should negatively impact your decision to purchase a property at auction nor applicable for all banks. Each auction foreclosure sale is different and requires a lot of details to be handled when buying a property at auction. Consult with your real estate agent and/or your real estate attorney for questions regarding purchasing a property at auction.

As we stated earlier, the real question is that, in view of the purchaser, how much his entire purchase money worth more compare to low down payment and getting the loan. The answer is different for each case and each type of purchaser, e.g., individual looking to live in the property or investor that wants to flip and profit.

Example:
If the purchaser of a home is an individual "home owner to be": he intends to live in his property a his primary resident, hi is locking his entire purchase money for a long time before he sells his property.

If the purchaser of a home is an "investor": typically he fixes/repairs (flipping) and put the property for sale in the market and after few months he sells and get his money plus some profit back. Also, investors cannot get loan, even if they are qualified and have the greatest FICO score, because of number of limits that an entity could have open loans at the same time. This makes it less even less disadvantage for investors compare to an individual purchasing a property at auction to live in it.

E.g., some they may put value of about 3% of the purchase price for this difference.

If the purchaser of a home is "owner to be",  he/(she) should account for much more loss than an investor for locking all purchase money for a long time (e.g. 30 years or when he sells his property)  vs. a few months for investors.

CONCLUSIONS:Coclusion of things a buyer should know in buying a foreclosure REO property

I came up with some numbers as follow, but I need your inputs based on your thoughts and experiences to verify mine.
For an individual "home owner to be",
paying the entire purchase amount in cash, I put 10% of the purchase price.
For an Investors "Flipping Over", paying the entire purchase amount in cash, I put 3% of the purchase price.

QUESTION: I need your Answer:

Based on your experiences and expertise, how much do you put as negative for paying the entire purchase price in cash vs. getting a loan (assuming qualified and rate of 4%) for individuals "home owner to be" and for investors?

 

For more information on Foreclosure Process and purchasing foreclosed (REO) property, please visit http://www.TexasFiveStarRealty.com/Foreclosure_Process.asp

For a current list of foreclosed (REO) properties in North Texas, please visit http://www.TexasFiveStarRealty.com/List_of_Foreclosures.asp

Click to Subscribe to our RSS Feed
Subscribe to this page RSS
follow me on Texas Five Star Realty Facebook follow me on Texas Five Star Realty Twitter follow me on Texas Five Star Realty WordPress follow me on Texas Five Star Realty ActiveRain follow me on Texas Five Star Realty LinkedIn follow me on Texas Five Star Realty Plaxo Send Texas Five Star Realty Text via email  
Real Estate Questions Question"(138)":True or False? In a 30-year FHA loan with interest rate of 4%, FHA Monthly MIP will be waived after about 10 years.
Click HERE to see the Answer

Equal Housing Opportunity Commission Bahman Davani REALTOR

Bahman Davani, CM
Broker/REALTOR®
ABR, GRI, CDPE, SFR,
TAHS, eAgentC, and
CCIM Candidate

Office: (214) 457-7055
Cell: (214) 457-7055
Fax: (972) 596-7984

P.O. Box 261665
Plano, TX 75026-1665

Contact Form

First Name Required*

Last Name
 

Email Address Required*
 

Phone Number
 

Comments/Questions


Enter the code above                  

Texas Five Star Realty
P.O. Box 261665
Plano
, TX 75026 US
Phone: 214-457-7055
Website: www.texasfivestarrealty.com/
Follow ME button from AddThis
Follow US:

Share, Pin and LIKE This Page:
    Share this page in Facebook 

My Blogs:
Subscribe to Bahman Davani Blogs RSS See Bahman Davani Blogs See Bahman Davani Blogs in ActiveRain See Bahman Davani Blogs in WordPress Texas-Five-Star-Realty-Manta-Badge See Bahman Davani Blogs in SlideShare See Bahman Davani Blogs in Zillow   See Bahman Davani Blogs in Klout See Bahman Davani Blogs in Plaxo See Bahman Davani Blogs in Blogger

My Real Estate Designations and Certifications:
Bahman Davani REALTOR Bahman Davani Commercial REALTOR Bahman Davani ABR Designation Bahman Davani GRI Designation Bahman Davani CDPE Designation Bahman Davani SFR Shortsale Forecolsure Resource Certification Bahman Davani TAHS Texas Affordable Housing Specialist Certification Bahman Davani Inbound Marketing Certification Bahman Davani Certified Manager from Institute Certified Professional Managers Bahman Davani eAgentC Internet Profficiency Certification Bahman Davani NMLS RMLO Residential Mortgage Loan Originator License Bahman Davani TRLP Texas Real Estate Leadership Program Graduation Send Texas Five Star Realty Text via email

Additional Resources and Newsletters:
Texas Five Star Realty website Mortgage News Daily from Texas Five Star Realty website Bahman Davani Credit Score Tips and Tricks book published by Texas Five Star Realty Bahman Davani Credit Score Tips and Tricks book published by Texas Five Star Realty          


. Copyright 2011-2014 Texas Five Star Realty Web Site Developed by We provide a fast and easy solution for your business. .