The subprime fiasco, tougher underwriting standards, and increasing foreclosure rates and interest rates are all exerting additional pressure on the slowing market many places in the country. Are you prepared to survive a declining market? A buyers' market, where the prices are declining, is the worst possible market in which to be a commissioned sales person. Price deflation is bad for everyone. Buyers are reluctant to purchase because they fear that prices will decrease further. Sellers are unable to sell, which results in more foreclosures. Lenders end up taking back more property, and brokers end up doing fewer transactions. If your market is declining, here are four steps that you can take to avoid being caught in the downward price spiral. 1. Price properties below the comparable sales Declining prices make obtaining an accurate CMA difficult. Assume that a seller's property is currently worth $400,000. If property is declining at an annual rate of 5 percent per year (...
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