So You Think it's a Bad Time to Purchase Real Estate
January 11, 2009
With all of media that the real estate industry is getting these days especially the mortgage sector one would have to wonder whether or not this is a good time to purchase real estate as a new buyer and definitely as a business owner. The simple answer is yes, it is a good time to purchase real estate! As a matter fact it is the best time for cost conscious purchasers who have a handle on two things: Credit and Finances. These items have always been an important determining factor in purchasing real estate and with the mortgage industry being burned in the sub prime market; you can't blame them for backing away from certain type of lending.
However, this now leads to many benefits for this credit and finance conscious buyer. First of all make no mistake about it, we are in a "buyers market", which means that the odds are favoring you to find a great deal. With so much inventory on the market you can be extremely choosy. Your negotiation efforts are much higher because people who need to sell want to sell yesterday.
For a buyer who has done their homework and know the area that they are ready to purchase in, here are a few tips to assist:
- Know how much you can afford. This is not based on what someone tells you, this should be based on your budget and how comfortable you feel with the purchase. The normal rule of thumbs for business owners go out the window because our income is based on what we set it at in most cases and not how much our business makes. (Rule of thumb is no more than 40% of your monthly income for housing payment)
- Know how much you should pay. This is based on the market, what properties are selling for and what you have seen people discount their properties for. Understand that when one person discounts their property within a mile radius of the area, if the property sales at that lower value, your chances for getting an even better deal just went up. So watch the market and don't be too eager.
- Know when enough is enough. Yes by all means negotiate the best deal for yourself, however know when you have reached your goal and don't over do it. You can ruin the deal.
Set goals and comfort levels for yourself and by all means educate yourself as much as possible so that you can enjoy the process of investing in the American Dream!
As always, happy investing!
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Sonia is the co-founder of Intown Condos & Lofts, a sales and marketing company for newly built and converted condominiums in the metro Atlanta area and the author of Real Estate & Wealth: Investing in the American Dream. For questions email asksonia@SoniaBooker.com or visit www.SoniaBooker.com.