...and, Cash is King. One man's view.
I was giving this some thought while driving to the office today. How does the current state of our economic affairs affect the real estate market and those in the market? I define "those in the market" as people who earn their living providing professional real estate services and those looking to buy and/or sell real estate. We are all "in the market."
The effects are different for everyone depending on how and why you are in the market. For those of us earning a living providing real estate services, much like any other professional or journeyman during down business cycles, we must work harder to earn new customers and perform above expectations to please and earn referrals. Our income is suffering too.
Cash is king. For those looking to buy their first home or to upgrade to a larger home you will need a larger down payment, verifiable income, and a good credit score. That means if you have managed to save some money for this purpose you will be in good shape but perhaps purchasing a little less house. If you don't have the 20% (perhaps 10%) down payment, then saving for it is the only rational solution. Money is avaiable under these conditions - strong down payment, verifiable income, and good credit score. The following applies to this group also.
I've heard the following attributed to Warren Buffet - Sell when everyone is buying and buy when everyone is selling.
Cash is king. If you are an investor or looking for a second home and have sufficient cash on hand Warren Buffet says it all. Most investors know that profits are made on the "buy side" of the transaction. In other words, buy at the right price and in the long run you will be rewarded.
If you are in the position of selling your home you must evaluate your situation. If you just want to sell but don't need to sell you should be resigned to the fact that your home will sell but for less than you thought, maybe even much less than you thought. Depending on when your "buy side" was, you may lose money, break even, and there are still those who can and do profit. If you don't buy into this reality then maybe it's time to take a break and get out of the market for a while.
If your time horizon with regard to a purchase is at least 3 years (5 is better) then real estate is tried and true to perform over time. I know Donald Trump believes in it.
If you must sell your home price it right and look at that first offer long and hard. It's usually the best one you will get.
The subject of Short Sales and Foreclosures is a whole other topic...
Now the advertising plug...if you believe in buying real estate in times like these the most important thing to consider is where? The best suggestion is to buy where people want to be, buy where there will be growth, and buy where the lifestyle you most desire is provided whether it's a permanent residence, seasonal residence, or just a vacation home - southwest Florida, of course! Naples, Bonita Springs, Estero.
