The Real Estate Encyclopedia
Is Buying In A Down Market A Good Idea For Your Family?
Category - Real Estate Information Sources - Real Estate Articles

Are you thinking of buying a house, but are not sure if now is a good time? The best way to determine if now is a good time for buying in a down market is to do your homework. Learn as much information as you can about buying real estate in a down market because this will help you make an informed decision.

 

To help you get started with your research on buying in a down market, there are some important things that you need to know and consider.

 

One: If you have a home that you want to sell so you can move up to a more expensive home, then now could be your best time to buy real estate in a down market because the longer that you wait to sell your current home, the lower the price you will get for your home. So, if you need to sell so you can buy a more expensive home, then now is a great time for you to be buying in a down market.

 

Two: For some people, the smart thing to do is to sell your home now, so you can get the best price for it. Then find alternate housing for a few months, then after a few months have passed, buy your new home.

 

Three: If you need to sell your home and then buy immediately, then you will still be ahead because the price reduction for your purchase is greater than the loss on the sale of your home. You have to consider the loss you would take on selling your home. For example, if your current house is worth $400,000, but due to high inventory and not a lot of buyers, you have to reduce the price by 10% of what you would have originally sold your home for; so, instead of getting $400,000, you would instead receive $360,000, which means you would lose $40,000.

 

Now, you have to consider what your real profit would be. For example, you bought your $400,000 home 10 years ago and you originally paid 200,000 for it, you would still be ahead by $160,000, minus the costs of selling, right?

 

Now, it is important that you consider what you will save on buying your new house. If you are going to be moving up to a house that costs $500,000, which is still in the same down market, you can more than likely get your new home for a 10% discount of $50,000 or $450,000. This will end up saving you $50,000. Now, you have to look at the bigger picture or in this case numbers.

 

To review; you sell your home and lose, $40,000, but you made $50,000 on buying real estate in a down market; this would mean that you are still $10,000 ahead on your real estate investments.

 

The most important thing to remember when you are considering buying in a down market is that you have to take time to do your research and figure out what you would lose and gain by buying real estate in a down market. This will help you make an informed decision about whether it is a good idea for you to buy and sell real estate at this current time.

 

Peter Vekselman has been successfully investing in real estate since 1996.  He has completed over 1000 real estate deals, owned a construction company, been a private lender, and owned a property management company.  Peter currently works with clients all over the US helping them achieve riches in real estate www.CoachingByPeter.com .



References


External Links
www.coachingbypeter.com
 
 
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Real Estate Information Sources - Real Estate Articles
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