There is no perfect instrument or statistic to determine how much housing crisis may last. But this does not in any way mean that we should cloud away ourselves from some ideas and information that could help us make reasonable decision at such times. When there are obvious crisis in the real estate, here are some golden rules which may be of help to you.
- First Rule: Your agent and your interest:
If you have to buy or sale a property through an agent, it will be very important to determine if your agent has your interest at heart or not. It’s true that the two agents involved in selling a house will eventually be paid by the seller of the building; this may tend to affect your interest in the minds of the two agents. These agents are the listing agent and your agent. There have been issues where the agent will convince the buyer of a property to go for houses which are not in a very good shape, simply because of their own interest. Their main interests are the fees they will be paid and not the interest of the buyer. So, it will be wise to agree a commission and pay our agent upfront before any dealings. When this is done he will be forced to take decision which will be in your best interest.
- Second rule: Don’t try to predict the bottom price:
The truth is that the worth of the property you just bought today may tend to drop so badly by next year. And in situations like this there is really nothing that you can do to savage the slide. When such a situation befalls you, there is that tendency that you could begin to think, why not I just try to guess or predict the bottom of the slide. Well, this is a very wrong thing for you to consider doing. Do not try wasting your time with such predictions as this may never come your way so easily.
When you intend to bid for a property, it’s best to find a good bargain and try to place a strong bid at your aim point and drive it as hard as you can. Try not to be carried away by the sellers asking value for the property; all you need to do is to place a bid around 10% below a comparable home and what it is selling for. Don’t really bother yourself much if the seller sticks to his value or price. All you need to do is to just move on.
- Third rule: if you want to buy, buy now:
Homes are also there and will most likely remain there. The only challenge is going to be financing which will continue to get more and more expensive. You will observe that depict the fact that the Federal reserve recently slashed interest rate, but you will also notice that the fixed mortgage do not really follow the Fed. And they usually reflect bond market expectation, which is centered on inflationary rate. What this means is that if you want to buy better do that now, as there could be a much higher interest to be paid on mortgage loans and interests if the prices drop further more.
So if you have the intension and the resources to buy yourself a house, it’s wise to do that right now. The future drop in price may still not be favorable to you despite all the long delays.
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