Buying Real Estate In A Depressed Market

Recently, there’s been a significant slowdown in the real estate market. Before that, there was a boom the likes of which has rarely been seen before. Interest rates were low, homes were appreciating in value by the week, the stock market didn’t look so good for investments and first-time buyers were extremely keen to get into the market.

Everybody attached to the mortgage business also experienced a boom period. From mortgage brokers to real estate agents and new home builders. They were all raking in money and like every boom people start to presume that it will never end. During the fourth quarter of 2006, things started to slow down a bit and after a little while the financial news media began to reflect this in some of the reports and while things were still stable, some of the air was starting to come out of the bubble just a little bit.

In the early part of 2007, there’s been an inevitable move that always happens when a slowdown occurs. What happens is that investors who were purely in the market on a speculative basis decided to move their money and this creates a market where people are trying to unload property.

Bust may be an over-statement of what has happened but at the same time there has been a bit of a thud in the market. Interest rates are also rising and invariably this is one of the causes and indicators of a slowing market.

While this all may appear to be bad news, this is not necessarily the case. A slowing market will always create opportunities as well. For example, if you’re first-time buyer and interested in getting in to the property market and owning your own home, now might be an ideal opportunity. A slowdown will always create a buyers market and if you’re in a situation where you have your deposit and you’re in good financial shape than this might be an ideal time to start looking.

Remember, your powers of negotiation will be far more useful now that they would’ve been a couple of years ago. When the boom was in full swing houses went for market price and sometimes significantly above that. In a slower market you will have the opportunity to negotiate a price and you may be able to save yourself significant amounts of money as a result.

If you find yourself in this situation, one of the main things that you want to have clean before you go near any mortgage lender is your credit rating. It’s very important to be able to have a credit report that is in order and showing well. This will also give you far more negotiating power when it comes to negotiating a mortgage deal from a lender which will ultimately allow you to buy your own home.

Once everything on your side of the deal is in good shape, you will be left in a position where you will be negotiating with a strong hand when it comes to dealing with both real estate agents and mortgage lenders. Over the longer term, invariably houses are always a good investment so it you can buy when there is a dip in the market then you will be able to save yourself money on an almost guaranteed investment over the longer term.

Buying Real Estate In A Depressed Market