Real estate is one of the only assets in the entire world that appreciates, or goes up in value reliably. As a matter of fact, real estate consistently appreciates between 7% and 12% in most areas of the country and even higher in others.
Real estate is perhaps the single most important investment that individuals will make in their lives for themselves and/or family. A home is where we live and our family grows. There are many types of real estate that can be purchased and they can be purchased for a variety of reasons ranging from rental income to value speculation.
For the intents and purposes of this manual we will discuss the purchase of single family residences for individuals or families to personally occupy them. More important, this manual will focus on purchasing a single family residence without qualifying and "nothing down" purchasing techniques.
The buyer locates a home that he or she wants to purchase that is on the market by a seller. The buyer makes an offer to the seller for either the amount the seller is asking for and terms or a lower price and different or modified terms. If the seller does not accept the buyers offer, the seller may counter the buyers offer. If the buyer does not accept the sellers counter offer, the buyer may counter the sellers counter offer. This process may continue until a deal is made, or either party decides that they do not want to proceed in negotiations.
In either case, and regardless of when an offer is accepted by the seller, the home buying and selling process is under way! The buyer proceeds with getting a loan from a mortgage company and both parties enter "escrow" or the transfer of ownership of real property from one party to another through an independent third party most commonly referred to as "the title company." During this process the title company checks to see what liens the seller may have against the property. These can be anything from mortgages to other debts for which the seller has used the property as collateral.
Other debts can also be accessed against the property such as judgments and taxes.
Once the title company has determined through a public records search of various county records what debts the seller has against their property they expediently move to "close escrow." Prior to closing, the title company will present to both buyer and seller a statement known as a "settlement summary," which shows both parties what their costs will be to close escrow, or transfer the ownership of the property from the seller to the buyer. The settlement summary shows what proceeds have been placed into escrow and who will receive what portions of these proceeds. Ordinarily, the proceeds are sent by the buyers mortgage company and then placed in escrow to pay the seller. However, all traditional and non-traditional costs are paid first. Both buyer and seller are offered title insurance in case the title company missed any ncumbrances against the property, or defects in title.
Once escrow is closed, the buyer is granted ownership of the property through the sellers relinquishment of the deed or title. The title company first pays all the debts against the property, including the sellers mortgage (if any). The balance goes to the seller and the buyer signs a promissory note secured by the newly released title.
In a perfect world, this would be the typical home buyers experience. However, what if the buyer cannot qualify for a mortgage. Factors ranging from income to a short time on the job can affect a buyers ability to borrow.
For this reason this manual will cover techniques and methods to purchase real property without qualifying through a bank or mortgage company.
