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As the market shifts to a buyer’s market, it’s imperative that you educate yourself on what and what not do when investing in real estate. With thousands of condos to choose from, here are a few tips on how to purchase what’s right for you in a down market.
Do your homework. While buyers have the advantage in a slowing market, that doesn’t mean you should purchase real estate blindly. The first step is to search the internet for listings and gain insight on a particular area. The objective of this research is to get to know the price range in the neighborhood and buildings that interest you. You want to get a realistic sense of what you like within your budget.
Work with the right agent. You should always work with a real estate agent who specializes in a particular neighborhood or market sector. I’ve dealt with numerous clients who came to me because they were working with an agent who “specializes in Miami,” only to learn that they didn’t specialize in anything. Working with an agent who specializes in condos in Downtown Miami and Brickell is very different than working with an agent who sells single-family homes in Key Biscayne. Not that there aren’t agents who specialize in both, but these agents typically have decades of experience in the industry: This could be the difference between making a poor investment or making a great one.
Get your ducks in a row. Being able to move on a deal at a moment’s notice is key in a down market. Cash is king and will always give you more negotiating power; however, if you’re planning on financing your purchase, make sure you get pre-approved for a mortgage in advance.
Don’t be afraid to walk away. As inventory increases, prices gradually begin to drop. In a buyer’s market, there are always plenty of options to choose from. If you feel you are not getting the deal you deserve, don’t be afraid to walk away. The buyer has the power in a down market. Some sellers will refuse to accept that the market is down and aren’t willing to negotiate at a fair market value. Don’t let your ego get the best of you.