If you are currently looking to buy Dallas TX real estate, you probably have a good idea of the general range you can expect to spend on a home. So you might be surprised when a great-looking home shows up on the MLS with what seems like a shockingly low price tag attached. The extra-low price seems too good to be true and – most of the time – it is.

In many cases, the price you are seeing does not represent the actual asking price of the property. Rather, it is likely a property that is in “pre-foreclosure” and the amount listed actually represents the balance of the defaulted loan, or the amount the current owner is in arrears. Below is an excerpt from an article I found at Inman News that does a great job explaining how these properties end up on MLS search engines, and what you can do to spot them:
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Banks are not in the business of owning real estate and are motivated sellers. Often, you can get a decent price for a foreclosed property, but here is what you need to know before you shop. These tips will save you time, money and lots of headaches!

According to RealtyTrac, lenders repossessed 28 percent more homes in May than April 2008 and 158 percent more than May 2007.

Although banks don’t want to be in the real estate business and will sometimes accept ridiculously low prices to get rid of their inventory of foreclosed homes, buying such properties has drawbacks.

Here’s what you need to know.

1. Search the Internet
The Internet can help you locate foreclosed homes. You can search national websites, such as Foreclosures.com, ForeclosureListings.com, ForeclosureNet.net or RealtyTrac.com. These sites have Free Trial periods, but then require a subscription. Or, you can search locally at no cost and even sign up to have a list of foreclosed properties emailed to you as they come on the market.

2. Use a Realtor
Getting a lender to deal with you directly is like pulling teeth (lenders typically deal only with real estate professionals) or at auction (you may get caught up in the excitement of the moment and bid more than you should).
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Every cloud has a silver lining and the foreclosure crisis is no different. The down side of the foreclosure crisis is the hundreds of thousands of people who have lost their homes. The upside is the ability for the country’s leading real estate housing charity, Habitat for Humanity, to purchase properties below market value. Many Habitat for Humanity chapters across the US are snapping up dozens of empty lots and unoccupied homes — some for as little as half price.

“The down real estate market is a wonderful opportunity for all Habitats,” said Gage Yager, executive director of Trinity Habitat for Humanity in Fort Worth. “As prices drop, we have the opportunity to acquire at prices that just weren’t available a few years ago.”

Habitat offers affordable housing to low income families. The charity uses volunteers to rehab these newly acquired foreclosed properties or in extreme cases, tears them down and rebuilds.

Some criticize that Habitat is taking advantage of someone else’s misfortune, but renovating an already vacant property is far better than leaving it abandoned, resulting in higher crime rates and lower property values.
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Thanks to increasingly tightening credit standards and rising interest rates, there has been a lot of buzz about the startling increase in foreclosure rates across America and the Dallas Fort Worth area.

Many Dallas Fort Worth home owners think it cannot or will not happen to them, but what would you do if you were actually faced with the prospect of foreclosure? It is important to know the “lingo” of lenders and understand what the options are so that you can make an informed decision on the best way to move forward in a stressful situation such as foreclosure.

This article from FreddieMac.com is a good resource that defines the terms associated with foreclosure and walks through the steps to take if you think you may soon be unable to pay your mortgage. Among the topics covered in this helpful article:

• What to do if you can not pay your mortgage
• What if you can no longer afford to keep your home
• Beware of scam artists

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“Homeowners: Can’t pay? Just walk away”
This was an actual headline on CNNMoney.com yesterday. It is garbage like this that is taking an already unfortunate situation and making it worse!

I promise you, that SINGLE STATEMENT right there opens up a whole can of worms on a problem that is taking Congress, the President, and many, many people who are WAY smarter than I am to try and figure out. So I cannot even really scratch the surface of talking about a problem that has taken reams of paper to write the bills that have been created to try and fix it. And listen, I know the ISSUE is the fact that people aren’t or can’t make their mortgage payments are losing their homes, while the PROBLEM is the reasons why they can’t.

People in the banking world (yes that includes brokers), have put these people in loans that aren’t right for their situation. Then there’s the falling home values, and on and on. I know one came before the other, but come on? Just tell people to walk away from their homes?

What happened to the days of doing what you said you would do? In this case, paying your mortgage? If you lost your job that is one thing. But there has been so much fraud in this business, much of it from investors who started the idea of walking away that led to massive amounts of foreclosures. This led to distressed neighborhoods, which led to lower property values. Now we have an article with a headline like this! And on top of it all, there is a company in San Diego called “YouWalkAway.com” where for $1000, they will walk you through the process of ditching your home!

With all that is going on, I think we will see more and more people trying to make a buck on losing their homes. As for the headline of the article, the writer subjectively looked at how easy it was for people to walk away from their homes when you are upside down $60,000 or more (meaning you can’t refinance), your ARM just adjusted upwards (meaning your payments are going up), and you started missing payments because you can’t afford your current ones and you can’t refinance. Maybe it IS easier to walk away and that is a sad commentary on the state of homeownership right now.

Craig Pollard is a mortgage professional and owner of Texas Mortgage Team. He specializes in the Dallas Fort Worth area and is a frequent voice on Texas Home Central’s blog. Craig can be reached at 972-317-9900 or emailed by clicking here.

First of all, I know foreclosure is never funny and I hate to laugh, but sometimes you just can’t help it!

I read an article in the Associated Press about a woman who tried to sell the flooring, baseboards and fixtures on eBay after her bank placed her home in foreclosure. According to the Associated Press, a Superior Court judge intervened after the city complained that the home was being desecrated. The city had an interest because it gave the 71-year-old home owner a break on property taxes because the property is considered historic.

The home owner’s reasoning was, “I have to give my house back to the bank, and I want to be sure I recoup a little bit of my money… until the bank takes it away, that’s my home!”

I’m sorry to laugh because going through a foreclosure is very difficult, especially for a woman in her 70’s. I’m not sure if I should cheer her on or shake my finger. Technically, until the house is paid off, it does belong to the bank and so stripping it to the bones and selling off the scrap is stealing… but still, you have to give our friend props for creativity!