7 lifesaving tips for buying property in a falling market

Unpredictable at times, a falling market is a property buyer’s biggest fear. While a falling market presents several opportunities for interested buyers, it isn’t always easy and successful. If you play your cards right, however, buying at this critical time may be beneficial for you. It all depends on understanding when to go for it and when to pass.

When the supply outweighs the demand, prices will go down. As a home buyer, this is great news. You will be able to buy your dream house at a reduced price. As an investor, however, you must be careful of what the future holds for the property you are buying. Here are 7 tips that will help you tackle a falling market.

Study the Market

Don’t just jump into a deal because the market is down, you need to do your homework first. Search online for listings in the area you want to buy property in. Find out the price range to know what a low price would be. Furthermore, gain some insight on the area you are interested in. You should seek promising neighborhoods that are more likely to go up in value. Talk to several realtors and real estate agents to fully understand what you’re going into. Once all your research is done, you are more likely to make an informed decision before investing in property.

Arrange your Finances

An obvious step, preparing your finances is something you cannot overlook. Although property prices may be down, they are still a commitment you will have to bear with. If you will be taking out a mortgage, it’s best to ensure you can receive it before signing papers on the home. Moreover, you should have the property inspected to find out how much you will be spending on repairs. Never walk into a sale without having all your financial matters sorted out. This way, you have a better chance of landing a successful sale in a falling market.

Fast Sales

Every once in a while, you may come across a property where the owner is urgently trying to sell. This, of course, is the optimum opportunity for a buyer because it adds bargaining power. The key to finding such an opportunity is to note how long the home has been on the market and if it has undergone a few price reductions. In most cases, this suggests that the owner is trying to sell by any possible means. If you happen to find such a gem, then you can make it work in your favor. Ask the seller if they’re willing to add any furniture or fixtures to the deal. Moreover, ask if they are willing to fully or partially cover the closing costs. This rare opportunity may be everything you need.

Negotiate

An everlasting part of property sales, negotiations are almost always doable and beneficial. In a falling market, realtors want to sell as much as you want to buy. This means that most of them are more willing to negotiate prices in order to close a deal. However, you have to be smart about this. Know when to start negotiations and when to give up. After all, you do not want to lose this deal.

Sometimes it’s best to walk away

Yes, you may never find a property as promising as this, but not everything is what it seems. It’s easy to get carried away and push yourself to buy a home, but that is never smart. Set a budget for yourself and stick to it. If you are unable to reach a deal you are happy with, then walk away. Remember that in a falling market, there are always many options out there. Also, an increase in supply gives you, the buyer, all the power. Don’t worry too much about losing the home you’ve dreamt of and try to find a fair market rate that you can afford.

Say no to bidding wars

Bidding wars are a waste of time, especially in a crashing market. At this point, prices are already down, so don’t push too hard. Set a price limit and try to negotiate for it, if the seller disagrees then move on. This is not a competition you have to win, but an investment opportunity you must be careful about. In order to avoid wasting your time, and possibly money, stay away from bidding wars and remember that there are many other opportunities out there for you.

Understand the seller and the property

It’s important that you familiarize yourself with the situation surrounding the property. If possible, find out why the owner is selling the house and if there are any problems with it. Perhaps the seller cannot keep up with the mortgage or they are moving and want to quickly close the deal. Understanding the property, its owner, and why it is being sold can be beneficial for you. It may help you land a better deal or persuade you to walk away from the property and search for another.