Depending on where you live, your local real estate market may be experiencing a recession. Historically, these market adjustments have served as a natural hedge against runaway price inflation, and in the long run they can be very positive, but as a buyer in one of these markets, you must shop wisely to protect your financial future.
Here are 5 ways you can take advantage of a bear market and protect your interests for the future at the same time …
1. Look at the local job market. Know who the main employers are in the city and where your employees usually live. Read the newspapers and pay attention to the stability of these employers. If the business is in financial trouble or is laying off employees, use caution when shopping in areas densely populated by your employees. Yes, you can get a great deal, but home prices can drop dramatically around you and cause you to lose money. Plan for that in your negotiations.
2. Research new business developments in your area. If you find that a new shopping / retail center is close to an area you want to live in, take the time to find out which stores are planned for development and take a look at what things like traffic flow and access will look like. managed. A bad plan can negatively affect property values in the area, but conversely, a well-planned development can attract buyers like a magnet that increases property values.
3. Learn about zoning. If you buy a home next to land zoned for commercial development and don’t realize it, your property value could be adversely affected by increased traffic and the type of development. If you are looking in a fully developed residential area, this may not be a major factor, but be aware of nearby open spaces and your zoning that could make accessing your residential area more challenging. Again, good developments can be beneficial to you, but consider how changes could affect value in your negotiations.
4. Drive through the area where you want to live. Bring a camera and notepad to record what you find. Look for things like for sale signs, ruined properties, new construction or residential developments, open lots and land, road and access construction, and the availability of retail services. Lots of “for sale by owner” or real estate signs could spell trouble, as numerous homes for sale could cause a price-cutting war to sell. Again, it may be beneficial to you, but you must take it into account in your negotiations.
Ruined properties will reduce the value of homes in the immediate area, and new construction, or anything that increases housing density, can ultimately reduce value in a slow market as inventory increases and inventory decreases. number of buyers. Be wary of new developments without any notable construction activity, as there may be financial problems that could affect the value of all homes in the area. Don’t be the fool who pays the highest price for a home that no one wants.
Open lots and land availability can be positive depending on the area you are looking for, but keep in mind that zoning can change and there are many commercial developers looking for any possible piece of land to develop in many markets.
5. Negotiate strongly with the seller. I am a firm believer that houses are traded for fair market values, which means that the transaction should be beneficial to everyone, but that does not mean that you cannot or should not try to negotiate your best terms. Do your research and come to the table armed with extensive and current knowledge of the market, and a willingness to set your final terms and stick to them. Be reasonable, but firm. Be aware of the long-term implications of your purchase and make sure you have an exit strategy in place. Most importantly, don’t be afraid to defend your position. If you’ve done your research, the numbers will speak for themselves.
I hope these ideas help you make a smart buy in a declining market. You should be aware that even if you get a good deal on a home, the market can continue to slow down and cancel out your profits. Know your market well enough to resist fluctuations. Above all, secure the competent and knowledgeable assistance of professionals in the real estate industry to answer your questions and educate you so that you can shop wisely in our current market.