There are many ways you can purchase a property without actually having any money down to do the business. Unlike common beliefs it is even easier than what most people think, and you don’t need money down to settle the deal. Here are a few examples of how you can buy real estate with no money down; as incredible as it may seem.The first way, and maybe the easiest of all, is to borrow the money. This is the most common way to buy a property without having the money in you pocket. The best advice when using this method is to find a lender that is offering a low interest rate or use a home equity or similar line of credit loan. This will still bring all the tax benefits that normal mortgages bring.The second way to buy real estate without any money is to assume the mortgage that already exists. This is similar to borrowing money, but instead of asking for a loan yourself, you are just taking charge of the seller’s financing for a part of the price. Take a close look at the interest rate since the current loan can be great to assume if the interest is particularly low. You should also take a look at the mortgage loan clauses. Some prohibit the new buyer from assuming the mortgage which is not desired.A third option that is very useful is to get a lease with option to buy. This figure is not so popular among buyers since it is not commonly known. It basically represents renting a property with having an option to buy. In the agreement, the buyer and seller come up with a regular payment interval for the use of the property. This type of agreement also permits the lessee to decide whether to purchase the property at a given price during the lease. Normally a percentage, or sometimes all, of the rental pays will be credited to the purchase price.Another quick way to buy a property is to get finance from the seller. In this modality, the seller can decline a down payment and prefer higher monthly payments in exchange; or he can pay for the down payment if he wants to sell the property faster.Taking in mind that you can always negotiate the down payment is another advice in how you can get to buy property without money down. Since the amount of down pay and who is the responsible for paying this is mostly negotiable, like everything regarding real estate contracts, this can be arranged by the buyer and the seller. For instance, the buyer may elect the seller to produce the down payment or give credit at closing for the buyer’s payment. The buyer can also ask to pay the down payment in installments (either monthly or at the end of the year).Now these are only a few tips regarding the subject of purchasing real estate with no money. There are a whole lot of other ways a property can be acquired without having to pay money down. The first thing that must be dealt with is not money; it is making up your mind.
As a property investor, I am often asked what does REO mean when buying real estate for sale? An acronym for ‘real estate owned’, REO refers to foreclosure property repossessed by mortgage lenders. When foreclosure real estate does not sell through public auction it returned to the lender, who in turn lists the property for sale through an assigned realtor.A second question buyers ask is what does REO mean in terms of buying houses at discounted prices? Most bank owned homes are sold slightly below market value. Since properties are sold in “as-is” condition, banks consider home repair costs and adjust prices accordingly.Although REO homes are typically more expensive than houses sold through public auctions, overall they are actually cheaper. Most foreclosure properties require multiple repairs because foreclosed homeowners are financially incapable of properly maintaining the home.Many properties sold through auctions have liens and judgments attached. In some cases, foreclosed homeowners continue residing in the home until evicted through the court system. All of these issues are resolved once the bank takes possession of the home. Buyers are able to purchase REO homes with a clean title and quickly take possession.Real estate owned properties are sold through each bank’s loss mitigation division or designated realtor. Since banks have incurred foreclosure legal costs and fees associated with lien, judgment or tenant removal, there is little room for negotiating the asking price.Bank owned homes can be a great option for first time home buyers, real estate investors, or individuals looking for an affordable vacation home. REO houses are perfect for use as rental houses or lease-to-own properties. Since bank owned foreclosures are priced below market value, investors can reap profits by rehabbing and flipping the house or offering seller carry back financing.Buying bank REO properties can save investors and home buyers time and money. There is no need to spend time attempting to remove creditor and tax liens or commence with eviction action when tenants refuse to vacate foreclosure properties.Time-consuming details are taken care of by the bank; allowing buyers to purchase the property at a discounted rate and quickly take possession of the property. Closing on a foreclosure home can take several months, while REO purchases can be expedited in a matter of weeks.Many resources are available for locating real estate owned properties. Countrywide, Remax, Prudential and Bank of America publish bank owned foreclosure homes for sale directly on their company websites.Many mortgage lender and realtor websites include additional resources to help borrowers further reduce the cost of buying houses through first time house buyer programs and government grants.These are just a few options available for buying REO homes at reduced prices. The Internet offers an abundance of information to help home buyers and investors locate distressed properties. Local realtors often offer foreclosure seminars to help buyers understand the process of buying foreclosure homes through auction or bank loss mitigators.Take time to conduct research, attend seminars or talk with real estate professionals to learn the ins and outs of buying REO real estate. Doing so can help you obtain exceptional real estate at significantly reduced prices.