9 tips for a buyer to close a profitable real estate transaction in a slow market Investing in real estate is by far one of the most profitable investment options in the present scenario. This is especially true when the real estate market is sluggish or the buyer/investor is in a strong position. It is advisable for a seller to hold the property during such times; but every seller does not enjoy such a luxury because of the need for rotating money, due to a financial crunch or due to a change in his job location. When the conditions are favourable, the buyer should be prepared to seize the opportunity. A buyer in a slow market holds the key to strike the best deal. An investor or buyer can take advantage of the market condition along with doing in-depth research and having proper market insights. In this scenario, when the rates are down and all the transactions are ending up at a low price, there is a fair chance for you to make a deal of a lifetime. The following are some tips for you to strike a favorable deal: 1. In a sluggish market, it is certainly crucial to keep track of the comparable properties in the adjoining areas. To make the most of a sluggish market, a buyer needs to compare prices with other available properties and bid on the most suitable one. In a slow market, buyers have the luxury to choose from a wide array of options. Researching is the key here. Today, most property details are available online with relevant contact information. It is imperative to do your homework before actually bidding for something 2. Buyers who are especially investors should try and look for properties that provide positive cash flow, which is the key to a profitable real estate investment. A property earning a rent or a lease is by far a good choice. A buyer needs to comprehend what will be the monthly monetary outflow and calculate the relevant inflow against it. The inflow should be sufficient enough to cover the maintenance cost of the property in question. Buyer’s especially in metros should compare the present or expected rental yields before taking a decision. Pure capital appreciation is not essentially the only way to gain from property investments. 3. A buyer should always keep an eye out for the motivated sellers in a slow market. A motivated seller will have his/her property on the market for quite some time and is likely to cut down on the price, several notches down. This will act as a boon for the buyers. Furthermore, few homeowners/investors are in a tight spot for money and are in a rush to sell-off their property which in-turn offers additional bargaining power to a buyer. In such a case, buyers can bid for an amount much lower than the market price and can ride on the profit bandwagon. Cash (liquid money) is the king in such a scenario. If you choose to put your cash to work it can fetch you some exceptional deals in such times.
4. A buyer should always make sure not to get into a bidding war with the seller, since it is highly unproductive and eventually costs more money. Slow markets are all about cutting a good deal, hence getting into a bidding argument with the seller can be counterproductive for the buyer. Experts advise buyers to avoid a bidding war, fix a price limit and abide by it. Slow markets are brimmed with homes aplenty and losing one deal will eventually be replaced with 10 others. 5. Slow markets offer the golden opportunity for buyers to get professional help at a modest fee. It is better to negotiate the fees to be paid to the real estate agent. A number of real estate agents and firms try their luck hard to strike a deal in a slow market and thereby knock off a per cent of their commission, by closing a property transaction. 6. To avoid all contingencies, buyers are highly recommended to enquire about the property title. When the market is slow and the prices of properties are taking a dip, sellers will try every means possible to dispose the additional not so good stock and unlock their investment. In few cases, the property may be encumbered or the title might not be clean or might have some grave water, sewerage, and neighbourhood issues. Hence to be on the safer side it is better to hire a property lawyer and talk to various agents regarding the competitive property, besides visiting the property in question a couple of times before taking a final decision. As a buyer, you should choose to sign property contracts that are devoid of any glitches, and avoid sellers who are not flexibleenough. 7. In such market conditions, developers/sellers have only a handful of serious buyers. Hence, they offer freebies and discounts to potential clients to sell off the stacked up inventory, thereby giving a distinctive advantage to buyers. Buyers should look for such units where the developers are willing to provide additional benefits. But don’t get carried away by the freebies. Pick and choose the same according to your personal requirements.Read the fine lines, else you end up payingmore! 8. Buyers enjoy the privilege to negotiate additional charges with developers in a slow market. Buyers can try to negotiate charges like those for car parking, clubhouse, EDC, IDC and preferential location etc. 9. Even banks are not flooded with adequate home loan requests at this time; buyers can negotiate to waive the processing fees and other charges on their home loan. Loan protection or loan insurance is also important where one can negotiate when the market is down. There is no doubt that a “buyer’s market” is a good time to buy; but such markets come with a disclaimer of additional caution. Be an organized, well-researched and calm decision maker. If you are serious about buying a property, then plan your finances accordingly. If you have plans to exit an investment and use its proceeds in the property deal, then strategize the entire thing well in advance. It is not uncommon for a deal to have gone sour midway due to lack of financial planning. Source: CommonFloor.com For Latest Updates on Real Estate Updates, Property News and Cities Infrastructure Developments Visit: http://www.commonfloor.com/guide
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