The answer is yes! Or you should at least consider in investing in real estate between now (This article was written in March 2008) and the next few months. And we will tell you why.
There is so much supply and not enough demand
By rule of simple economics, when there is more supply than the demand can meet. Prices must come down. Same goes the other, when the demand exceeds the supply. Prices will be higher (hope that wasn’t too elementary for you). It seems that every block you drive in there is a house or two for sale. And with so many houses on the market, sellers, and realtors are becoming more desperate to sell. If you are a qualified buyer, it makes logical sense to submit an offer below (or even way below) asking price. The offer you submit to the seller is entirely up to you, your budget, and what you feel the house is worth.
The amount of time it takes to sell a house
Like it was said in #1, sellers and realtors are becoming more desperate to sell. Realtors are not seeing the constant flow of commissions like they did a few years ago, and sellers are losing their homes due to adjustable mortgages and would want nothing more than to get their house sold. Since homes are taking a lot longer to sell (90 days or longer), and slashing prices are used to motivate buyers. It doesn’t hurt to submit an offer below asking price and if they accept, GREAT! If they reject, GREAT! Because it doesn’t affect you, and there is still plenty of inventory to shop around.
Banks want to lend money and not hold on to the house
When you see a bank owned property for sale. These are going to be golden in the near future, if not now. The way banks make money is when they loan money and collect interest (once again, hope that wasn’t too elementary for you). Common sense tells us banks are not making money, if they are not lending, and if they have to hold on to the property until it is sold. In addition, more bank owned properties are going to take place. What does this mean to you? A better deal for you, banks must perform a short sale (sale of real property where the fair market sale price is less than the loan balance) to get a property sold. This benefits you, because you have the upper hand, and you tell the bank what you are going to pay. Then it is up to them to take it or leave it. Once again, submit an offer below asking price.
Interest rates are more in your favor
Everyone has been hearing about the Fed cutting down interest rates to stimulate the economy. And judging from what we are experiencing, they might even continue to cut rates even more. Do we know that for sure? No! But the way rates are today and home prices are continuously decreasing it is definitely a good time to look into buying real estate.
Conclusion
Tags: buyers, Interest Rates, Investing, Motivated Sellers, Real Estate, sellers
