Strategies for Coping with a Slow Real Estate Market
Thursday, December 6, 2007
Although the real estate market is still down in many areas, you may find yourself in a situation such as a job relocation that will force you to sell your home or purchase a new one.
This article from CNNMoney.com offers helpful information on how you can still make a smart move in this unpredictable real estate market. Here is a summary of the tips:
- Sell smart – if you are trying to sell your home, you must set a realistic price based on the current market. You should also discuss with your Realtor the current average “days on market” that most properties are taking to sell. This will help you better plan for your move. If you are not willing to list for the current market value, and you do not want your house to be on the market for long, consider waiting out this down market as it is likely to turn around soon.
- Spend wisely – try to follow the rule of thumb of spending no more than 20% of your home’s value on renovations. At a time when your home may be worth less than it was this time last year, this is not the time to be sinking money into it.
- Foreclosures are still your problem – remember that, even though you are not facing foreclosure, the other properties in your neighborhood that are foreclosed upon will decrease your home’s value. As a general rule, for every home that goes into foreclosure in your neighborhood, your property value drops about 1%. That value will stay depressed for about two years. To find out where the foreclosures are in your area, go to realtytrak.com or foreclosurenet.net and type in your zip code.
- Recheck your mortgage – many homeowners do not know what kind of mortgage they have. If you are one of them, pull out your old closing documents and find out how often you're rate will increase and what caps there are to how much that increase can be. This information should be on the Adjustable Rate Rider, among the first few pages in your documents.
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