We all have these images in our heads from the great depression.
Somber hungry faces on once filthy rich families, tired worn out elderly
without homes. One might think investing during a recession is very
risky. But, we have to remember that real estate is far from any other
regular old investment.
Real estate is one of the few investments that we actually not only can
use, but need. Basically everyone just needs a place to live. And real
estate has systematically proven to have risen in value over the past
several decades. Yes, you are paying interest in a mortgage for your
home, but you are also getting a tax write off for the interest as well
as a write off for any property taxes that are paid.
The mortgage rates have not been as low as they are now ever since the
1960s. This is the ultimate time to purchase real estate and take
advantage not only of the low interest rates, but also the low prices on
homes. Because there are so many more homes on the market than buyers,
the price of homes in most areas has fallen considerably. On top of
that, people who overextended themselves in the early part of the
century are finding themselves in foreclosure.
Right now is the time to buy and buy cheap. Do not feel intimidated by a
real estate agent who tells you that you are going to �insult� someone
if you offer a low price for a home. The real estate agent wants you to
spend as much as possible because they get a commission off of the sale.
Use your head and take a look at the market. When you are buying a home
in a real estate recession, consider the following:
Is The Home In Foreclosure?
If the home is owned by the bank, you should be ready to offer a lot
less than the asking price. Do not allow a real estate agent to sway you
when it comes to making an offer. If they use any tricks such as �I do
not want to present such a low offer,� tell them that you will find
someone else who will. Real estate agents are a dime a dozen, especially
in the market today. If the home is in foreclosure, offer at least 20
percent less than the asking price. At least.
How Long Has The Home Been On The Market?
Years ago, a home that was on the market for a few months was either
priced too high or there was something significantly wrong with the
home. Nowadays, homes stay on the market for 90 days as a matter of
routine. Never make a really low offer on a home that is fresh on the
market unless you know the home is in foreclosure or about to become
foreclosed upon. Feel free to make low offers on those homes that have
been on the market for a month or so. Those that have been on the market
for a year are owned by people who are willing to wait out the storm and
will most likely not be sold for a low price.
Why Is The Owner Selling?
You can find this out by directly asking or asking around. If the home
is in a state of bad condition, chances are that there are financial
problems. You can offer a significant amount less. If the owner has
another home that they are buying, you can also offer less.
Make sure you do your groundwork and do not be troubled to invest during
a real estate recession. Contrary to what you may have heard, this is
the best time to buy a home.
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