We all know that home values over the last couple of years have been plummetting nationwide and of course with the mortgage problems we are seeing a huge number of foreclosures coming on to the market. In some areas of Southern California there are thousands of Notice of Defaults recorded every week.

Despite all the problems with the economy and falling home prices there is a some good news coming out this. According to a recent article in National Mortgage News the gap between the sale value of homes that sell as REO and the rest of all sales is widening. That means that bank owned homes are even more depressed in value than others.

In fact in Riverside, CA homes prices fell 28% comapred to sells in 2007 but REO sale value fell an average 34%. This is good for new buyers who have been sidelined since 2004 who simply priced out the market.

Interest rates are at historical lows, thanks to the action taken by the Federal Reserve Bank to buy billions of dollars worth of Mortgage Backed Securities. Couple this with cheaper housing and you have an opportunity to pick up a nice house for less than it is actually worth. Not to mention the tax credits that are now available for first time home buyers of up to $8,000 just from the Federal Government and some States now have their own buyer incentives.

We just closed on a purchase of a Bank Owned Detached Condo in Ladera Ranch, CA. This is a nice newer community with homes ranging from $700k to over $1m and town homes/condos from $300k to over $700k. Our clients appraisal came in at $345k and sell amount agreed to buy the bank was $340k. In fact we chopped the value of the house down…it could have appraised for as high as $367k but we took a conservative approach. Whats better, the bank actually provided a 10k for closing cost built in the price of the unit. Needless to say our client made out like a bandit.

Thanks to him buying an REO home he has walked into $27k in equity and he will receive TAX CREDITS OF $18,000 on his 2009 taxes. Not to mention the benefits of home ownership he will get to deduct as well.

If you are looking to get huge tax credits and get instant equity in home with low payments get out there and do it. Nobody is going to make you buy a house and build wealth, YOU HAVE TO DO IT YOURSELF.

JP Lowry — Preferred Financial Funding — www.preferredfinancialfunding.com –

http://activerain.com/jlowry

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