|
|
San Diego real estate library
Investing In Real Estate In A Recession
We all have these images in our heads from the days of 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 in fact, 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 since
the 1960s. This is an ideal 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.
Now is the time to buy and buy cheap. Do not feel frightened 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?
A few 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 condition 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 afraid to invest
during a real estate recession. Contrary to what you may have
heard, this is the best time to buy a home.
San Diego real estate library |
 |
