Consider selling – NOW! Post 124

Coach Mitch’s REFLECTIONS™


The Recession Is Over!!

This is the headline coming from the talking heads at CNN, etc. A significant percentage of the nation’s media is very determined to do what it can to bolster President Obama’s agenda. To this end, they trumpet any small piece of good news. If there are several sets of what can be construed as good news, then the thought must be shouted, “The recession is over – hail, hail, hail.”

Don’t you believe it

The recession is being fueled by the housing crises and the foreclosure mess will be with US for quite a while, at least one year more. One guru I spoke with says that real estate prices will be under pressure for the next decade. In his opinion, prices will continue to drop.

Prices are at their highs – right now!!!

Prices are continuing to spiral downward – all over the country. The few, small pockets where we still see strong growth, are not consequential. The downward pressures on prices are significant.

Prices are going down

In any kind of down market, i.e. a buyer’s market, the buyer will not be seeking to pay the FMV, Fair Market Value; they will be seeking to pay a lower amount. The feeling is that there are plenty of other choices and that a lower price can be gotten.

Just look at the trends

  • The “Days On Market” are longer.

This automatically means that it takes longer to sell the property and that translates into a pressure to lower the price. It only makes sense, the longer on the market, the more the question is asked, “What is wrong with the property that it hasn’t sold?”

  • Prices are lower.

There is greater pressure for the initial asking prices to be lower because Realtors realize that they don’t want to waste that precious moment when a property first comes onto the market. If the price seems too high, prospective buyers just ignore the property.

  • The pool of qualified buyers is much reduced.

This is the greatest danger. The “Mirror Test” no longer applies. Previously, if you could fog a mirror, then you could get a mortgage.

Banks are currently asking buyers to measure up to real banking standards. Buyers must prove income. The NICNAC, No Income Check, No Asset Check mortgages are no longer available. This eliminates buyers who are independent business owners because they consciously reduce their incomes so they do not pay higher income taxes.

  • Buyers must now pay a real down payment.

And these days, the down payments are significant, at least in historical terms. Minimally, 5 to10 percent and often 20 percent down payments are being required.

  • Appraisals are down.

Appraisers are under pressure to come in with numbers that are “accurate.” A 10 percent lowering on a $250000 house translates into a lot of money.

  • Foreclosure rates are way UP.

Foreclosure rates are staying strong and getting worse. With more property in foreclosure, the banks are under pressure to get rid of them and this lowers prices dramatically.

  • Commercial activity is down.

Mall stores are closing and there are few new clients in the wings, waiting to expand in a recession.

  • People are under great financial pressure.

The government is the biggest culprit because the government is seeking ways to increase its revenue.

The IRS is being more adamant. State tax collectors are being more adamant. Government feels that it has its obligations and needs money. If you are a casualty, well, that’s too bad, but there is a government program to help you – if it’s funded.

  • Private lender funding is UP. The interest rates are also UP.

This automatically means that the amount that one can borrow is DOWN. Higher interest means the monthly payments are UP. A higher monthly price automatically lowers prices. If a buyer can afford a maximum $1000 per month payment and interest is UP from 4% to 8% – 10%, then the difference has to come from a lowered principle payment which means a lower purchase price.

  • Tax sales are UP, way UP.

Because the real estate market is going down, tax delinquents are increasingly letting property go to tax sale. They may not have the monies to pay the taxes, but the real motivation to give up the property is that the tax delinquent doesn’t believe that they can sell the property for a profit, therefore, why should they continue to pay the taxes?

  • Buyers have hardened attitudes and are offering less.

It’s the marketplace at work. Speak to buyers or investors and their mentality is like sharks or alligators. They are just swimming around, looking for that bargain which can be swooped down upon.  Buyers want properties that are spotless – no work.

In the long run

We need to work for “Lower Taxes and Less Government.” This takes time, but it must to done if we are to survive as a nation.  I hope this is becoming more clear to you.

What to do today? – Consider selling NOW!

All this doom and gloom leads to one conclusion, sell NOW. Prices are at their peak now. Next year, they will be lower. Then how will you feel? You will say, “I should have sold last year.” Take the hit, lower your price and sell. I am. I have considerable equity in my home. I am doing some upgrades, about $10000, and I am putting the property on the market this spring.

Find great deals NOW

I am looking for some land, in a lower tax area, and I will probably build. The land prices are lower and the building costs are reduced. Sometimes there is excess inventory that can be gotten at a good price.

Coach Mitch’s Tax Delinquent Property “Ridiculously Simple System…”™

This is the perfect system to find property that can be sold at rock bottom prices.”Rock bottom” is the price that you need to pay in this market, because prices are still going down. We don’t know where they will stop and you need to be able to sell. Therefore, if you are considering buying property as an investment, you must buy at “rock bottom.”

See Coach Mitch’s “Ridiculously Simple System…”™ for details.
Be careful, but be profitable.

Mitchell Goldstein - Coach Mitch
518-439-6100 until midnight EST

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