I recently had a client cancel an escrow on a home they were buying. The home was a repo, (bank owned) and sold for $295,000, on the golf course, in Menifee. It was 2800+ sq. feet, 5 bedrooms with a huge loft, etc. etc. A model match had just appraised for $415,000 last month. This was a steal, even by today's market standards, yet my clients just backed out of the deal? Why? Because they couldn't take the risk. They were possibly going to be renting the home out, and the rental payments would have just covered the mortgage, and with the Mr.'s job instability, they decided it wasn't worth it...
HOWEVER, what is interesting to me is the fact that how can you NOT TAKE THIS RISK? EVEN in today's market? Even if home prices drop by another 20%, they were on a 7 year fixed rate loan. I bet that in 7 years, when they would have sold this home, the value would have been up by at least $100,000. How can you save $100,000 in 10 years? The point here is that if you find a home, especially on a golf course, or lake front, or with a spectacular buy, and you get it for already 10-20% under the current market, you have at least a 7 year fixed rate, then when the market turns around, your home will turn faster. Let me know your opinions. And by the way, Trump was on The Big Idea last night, and said that in the next 6 months, he is going to be concentrating on buying real estate. If you wait until next year, then you will be in the same race as everyone else. NOW is the time to start making offers on properties, I tell you.
