Recessions place downward pressure on real estate prices. This is, of course, good news for those who want to buy homes. The further prices decline, the more likely prospective buyers can find bargains as motivated sellers become increasingly desperate. But it is important to realize that not every listed property represents a bargain. Many properties are still priced too high, and thus should be avoided. The key is knowing what to look for.

In this article, we\’ll provide several suggestions for looking at homes for sale during a recession. The current buyer\’s market has revealed a number of opportunities that are likely to vanish when real estate prices turn upward. If you know how to proceed, you can find numerous bargains.

Research The Area Before Submitting A Purchase Offer

The general real estate market in the U.S. matters little. Instead, research the area in which you\’re planning to buy. Review prices for other listed properties in the area. Find out the average days-on-market (DOM) to note whether houses are failing to sell. Determine if the available inventory is low or high. A high inventory of homes may indicate a depressed market.

Speak with a real estate agent to learn whether properties are selling for their listed prices, or below. If most houses are selling at their listed prices, it usually indicates heavy buyer competition.

The more pertinent information you can uncover regarding a local market, the larger the advantage you\’ll have over competing buyers. You\’ll be able to draft your purchase offers with a keener glimpse of the seller\’s perspective.

Seek Preapproval For A Mortgage Loan

In a depressed market, sellers want to complete a sale as soon as possible. Properties that remain listed for long periods are more difficult to sell, and especially so given that newly-listed homes are often hard to move in such a market. Sellers are usually motivated.

There will likely be other prospective buyers interested in the same properties that interest you. One way to gain an advantage is to get preapproved for a mortgage loan. Doing so provides two benefits. First, it informs the seller that you are a serious buyer with the financial means to make a purchase decision. That gives you (and your agent) negotiating power. Second, being preapproved gives you the flexibility to make a fast decision if you\’re certain about a particular home. This may allow you to finalize a deal ahead of other buyers.

Learn To Identify The Signs Of A \”Motivated\” Seller

Some sellers are more desperate than others. This gives you an edge while your agent is negotiating on your behalf. If you learn what to look for, you\’ll be able to identify sellers that may be willing to offer concessions.

The first sign of a motivated seller is the number of days the property has been on the market. As the listing ages, the person selling the house may become increasingly desperate to sell. He or she may feel that local real estate prices are about to fall, and want to close the deal before it happens. Or, the seller might have already moved, which may mean he or she is carrying two mortgages.

Another sign of desperation is that the home is empty when you visit. This usually suggests the seller has already moved. Even if the person is not carrying two mortgage loans, the inconvenience of showing the property to every prospective buyer may be wearing thin.

Prioritize The Title Search

It is common for people to be in financial dire straits during a recession. Although this can motivate them to sell their properties, it may also dissuade them from revealing liens against those properties. For example, a bank may have loaned a seller $25,000 in the past with his or her house used as collateral. If the seller defaulted on the loan, the bank might place a lien on the property, giving it the right to sell it to recoup their money.

This demonstrates the importance of having an exhaustive title search performed prior to taking ownership of a home. The search will reveal liens and other claims.

Prolonged recessions usually reveal buying opportunities in many residential real estate markets. Be prepared. Conduct research and get preapproved for a loan. Then, tread carefully with an informed and cautious eye.

Great deals available for Harrisonburg Real Estate and real estate offerings at http://www.ValleyFarmsandLand.com

Great deals available for Harrisonburg Real Estate and real estate offerings at http://www.ValleyFarmsandLand.com

Author Bio: Great deals available for Harrisonburg Real Estate and real estate offerings at http://www.ValleyFarmsandLand.com

Category: Home Management
Keywords: Home, Budget, Advise