On the contrary, one might assume, when bad investment news abounds; investment opportunities can abound in the market. Bernard Baruch was one of the most astute investors in the world. He was born in 1870 and died in 1965. He was an adviser to presidents and an investor extraordinaire. Many of his axioms and principles ring true today. Bernard Baruck also said: “A speculator is a man who looks into the future and acts before it happens.” He then went on to point out, “Never follow the crowd.” An early opponent to be sure.
Wherever you look and see in newspapers, magazines, cable, network programming, radio, Internet BLOG, investment newsletters, real estate is bleeding badly. Bad news all around. With a forest of real estate signs sprouting from the ground with moss growing on the north side, things seem to have slowed down in the recent hot market. There is desperation of the seller in the market. Just a few months ago, sellers would get four or five offers on a property with a winning bid of $25,000 or more above the list price. In that period of euphoria, the list price was the “starting” price. In that referenced selling climate, the seller would decline any help from the seller to the buyer with prepaid and closing costs. As for the repairs of the flagged items found in a routine home inspection and termites. Sorry, Charlie, “as is, where is” was the rule of the day. When too many buyers search for too few properties, prices skyrocket. As the song goes, “What a difference a day makes” When too few buyers chase abundant properties for sale, prices fall.
Sellers now, in many areas, ask for offers and will pay all or most of the buyer’s closing cost and pay up front if the lender allows it and may even be willing to take out a second mortgage to facilitate the sale. Prior to this recession, many buyers were locked out of the local market due to accelerating prices and a high level of fierce competition for residential properties. Fools will not be rewarded. With the goal of a great property at an affordable price and a structured plan to achieve it, the chances are very good in many areas. This is not a scenario for a cash buyer. They will do very well on their own. If a buyer needs financing, then the exercise of determining affordability and payment level is necessary from the outset. There really are too many pitfalls to going one on one with a seller unless a buyer has someone on their side to keep them safe and on track when making all those low offers on super buyer terms. Now that the worm has turned, a buyer should focus on the areas in which they have a strong interest in living. Some criteria guide lines beyond the specifications for bedrooms, bathrooms, garage size, countertops, repairman or recently upgraded and remodeled will be established early on. So, to maximize the buying opportunity, the search should be focused on buyers under pressure.
The criteria would then be a vacant home, low or no mortgage, recent price changes indicating urgency, recent move to another city, property ownership, divorce, or other event that may offer an opportunity. It will be necessary to check with the listing agent to determine if there is an environment for negotiations on price and terms before viewing the property. There is no need to waste time with an unmotivated salesperson. The agent should be investigated as to whether the seller has expressed either on the MLS or shared with the public distribution communication agent that the seller is willing to work with the buyer. This will include assessing the seller’s willingness to negotiate the price and willingness to pay the buyer’s closing cost and prepay and fix EVERYTHING noted on the home inspection. If the seller’s agent is hesitant about these requirements, then the seller has not pushed the agent hard enough to make clear the urgency of the situation and become a motivated seller. It should be noted that this is a dynamic situation. A bear market will be influenced by increases or decreases in population with net gains, employment levels, and local and national economic situations impacting specific areas. Great buying opportunities will not wait for anyone. All parts of the country are different, take advantage.
Those who recently closed out of the previous hot market due to adverse credit histories can trade a buy in this bear market. If by any chance a borrower could only qualify for a 95% loan-to-value mortgage previously, they can now get the additional 5% down payment through the seller’s second mortgage. The second mortgage can be on favorable terms while having the seller pay all closing costs and prepaid taxes and insurance as many subprime lenders allow. While this market is down, a buyer should be prepared to make multiple offers on heavily buyer-biased terms and conditions. An apparently low offer may be an ACCEPTED offer. If a seller has to sell, THEY HAVE TO SELL. Stocks aren’t the only investments that can go up and down. The market bows to those looking for a deal in a falling market. Good credit or bad, it doesn’t matter.
come on rogers
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