If you are considering buying a home on a rent to own or owner financing such as a contract for deed there are some major price concerns you should have.
The national median home price of existing homes has been steadily declining and most experts predict that it could go even lower. The NAR (National Assocaition of Realtors) puts out a great report broken down by metro areas. You can view this report here:
Metropolitan Median Prices.
Does this mean it is a bad time to buy? Not in the least, what this means is for a buyer who understand the current market conditions it is a great time to buy. This isn’t 2 or 3 years ago, if you are buyin g ahome on owner finanicng you have to be extra catious in the current price as well as your particlar financing situation.
While the drop in home prices is typically good news for buyers, what is depressing this is the availabilty of mortgages. Mortgage requirements are getting stricter. While most expect this to improve in the next year or so this is still something you should look at carefully.
This is why today when buying an owner financed home now more than ever you must verify not only the financial worthiness of the home you purchasing. This not only comes down to the current value of the home but the potential future value. Also is there underlying financing and what does that financing look like? Is it a fixed rate loan? Is it close to what the property is currently worth? I can’t stress this enough now more than ever this is one of your most important considerations.
There are many tools and techniques to finding the current value and future value of any home on the market. You can learn the best way to protect yourself when buying owner financing homes in my book, How to Buy Owner Financed Homes. Please see sidebar for more information.