The Shockingly Non-Traditional Ways to Buy a Home in this Economy

Ready to buy a house in this market? Not so fast! According to Hum Real Estate

Executive Assistant Ivan Marquez “Mortgage rates have reached their highest levels in two decades, posing challenges to home affordability and overall market activity. The current rate environment has prompted cautious behavior among buyers, impacting their purchasing power and decision-making timelines.” What that simply means is although inventory has increased, affordability has declined which challenges the simple and traditional way of buying a home. Many buyers feel lost and have not a clue on any other way to afford a home without dealing with a mortgage. However, what if I told you there are some ways to buy a home that’s not only may be simple, but also affordable and may not even require a traditional mortgage? Here in this blog, I have nontraditional ways to buy a home, even in this dreadful economy. Let’s get started!

Bank Foreclosures

According to Miranda Crace at RocketMortgage.com, "A bank foreclosure happens when a home is seized by a lender. When you see a home listed as foreclosed, it means the lender owns it.

Every mortgage contract places a lien on a property. A lien allows a lender to repossess a house if an owner stops making the mortgage payments. Foreclosures are typically the result of a homeowner’s inability to keep up with their mortgage. In a foreclosure sale, the bank sells the property to the highest bidder at an auction and it’s usually cheaper than buying a home the traditional way".

This could possibly work on your behalf! You see, when you are ready to purchase a foreclosed home, you are dealing with either a bank or the government that wants it off their books because they are not in the business of keeping homes but only lending money. They are highly motivated to work with you to sell if you have all the necessary requirements and do your due diligence.

Tax Foreclosures

Another type of common foreclosure is Tax Foreclosure. According to Julia Kagan from Investopedia.com, Tax foreclosure is a process that allows local governments to seize and sell a property if the owner doesn't pay their taxes. It's also known as a tax lien foreclosure or judicial foreclosure. Now this one here can get interesting, unlike bank foreclosures, tax lien buyers can lose the property if the original owner was able to pay the tax lien that was owed in the period they would be entitled to buy back the property. This is also known as Right of Redemption.

If the original owner does not pay back the property in the time span the state allows, then the property is your free and clear of any debts! Please do your due diligence and check with your local county for more information.

Seller Financing

Amy Fontinelle from Investopedia.com states that Seller financing is a real estate agreement in which the seller handles the mortgage process instead of a financial institution. Instead of applying for a conventional bank mortgage, the buyer signs a mortgage with the seller.

That sometimes can be an amazing deal to buyers since there are some that have issues getting a conventional loan due to poor credit and not a big amount for a down payment. It can work for sellers as well-being that they become the bank and can set their own terms making it flexible for both the buyer and seller.  You can even work a deal to where you can pay little to no closing costs!

Lease- to-Own

Let’s say you’re in a home you admire, and you are ready to own it permanently, however there’s one problem; you only afford to rent the home! Here in this situation, we can apply the lease-to-own method.

According to Abby Doyle from NerdWallet.com In a rent-to-own agreement, you lease a home for a set amount of time before buying it. The process can be a way for people with limited savings to buy homes because the agreement builds in opportunities to save for a down payment. And if you have credit challenges, you can buy some time in the home you want before having to qualify for a mortgage.

This is great for someone who is working on building their credit and wants to place the money that they’re using for renting to help with the down payment. Killing two birds with one stone!

Short Sale

There are times where homeowners fall short on paying their mortgage and will have to sale the home to exit properly without a large amount of damage on their credit. James Chin from Investopedia.com states that" A short sale in real estate is an offer of a property at an asking price that is less than the amount due on the current owner's mortgage". This is where you can come in and assist them by purchasing the home for a sweet deal. Make sure you really do your due diligence in this type of sale because it can take a lengthy amount of time to finish the process. 

The good news is that it doesn’t require a lot of capital compared to an average sale of a home you can negotiate the deal in your favor and most of the work will be done for you by the lender to assist in preventing financial misrepresentation such as wire fraud.

Distressed or Vacant Properties

These are of course phenomenal opportunities for you, the potential homeowner because there is no competition, and you can really negotiate the deal in your favor because the seller is almost for certain motivated to get rid of that burden!

According to Jeff Hamann from Janover.com "Distressed properties can include residential, commercial, and industrial real estate — any property type, really providing a wide range of investment opportunities for those who are interested in this niche".

One person’s trash is another person’s treasure! You can take advantage of that opportunity to fix and make the home that you desire to live in and fix and repair, increasing the property’s value. Once you’re ready to sell you can absolutely gain a massive profit. Talk about big money!

Bonus: Talk to an agent

What can ease the burden of you the quickest? Giving the burden to the professional! Talk to an agent about the ways that you would like to buy a home and do your research on the one that specializes in any of these areas can make it easier for you to make sound decisions. Being that I am real estate professional, if you have any questions or would like to know about the topics that were discussed, feel free to email me at moneysavvyblog24@yahoo.com.

Wrapping it up:

Buying a home in a non-traditional way can have a huge advantage to you such as lower prices, less competition, and ways to repair the home to add amazing value, however these ways does come with risk and their own challenges so please make sure you do your due diligence and find out the best one that works for you.

Consider all your options and know there is no one size fits all when it comes to homeownership. When you do your research about non-traditional ways of homeownership, you’d will be able to thrive in any market and reap the benefits of being a homeowner.