The Ride Down in Real Estate

I'm sure you get a lot of news today about real estate and mortgages, and how BAD it is. It really is not that bad if you know what you are doing.

To give a good example for today's real estate reality, I would like use skiing as a metaphor. Before 2007 (from 1998 to 2006) life for everyone tied to real estate (even homeowners) was like a very comfortable ski lift always going to the top. Imagine sitting on the lift, there is a beautiful view of the mountains, it's not too cold, and you are very comfortable. That is how life was in real estate before 2007.

Then came 2007 and you had to finally get off that comfortable lift and the only way down were the double diamonds. If you've never been skiing, double diamonds are the most difficult trails to go down a mountain. Just imagine going straight down.

But you don't know how to ski the double diamonds….how are you going to get down the hill?

Today in real estate we are on double diamonds and the only skiers getting down the hill are the ones who prepared for it. Sure there will be one or two regular transactions (skiers taking the lift down), but you can't deny the massive amount of foreclousures, short sales, and reduced prices that have recently been popping up.

When you look at historical real estate drops, the graphs always show a quick, hard, straight down drop. Much like double diamonds look like at ski resorts. So what do you do in this case?

If you are a real estate agent: get acquainted with short sales, explain to your sellers they don’t have the equity they thought they had, and start building your "buyer" inventory….there are a lot of great deals out there.

If you are a mortage agent: get acquainted with FHA, start reconnecting with those real estate agents, and brush up on those "full doc" skills and all other important guidelines…because the underwriters are being hung if they get anything wrong on a loan approval.

If you are a consumer: make sure your agent's knowledge is current. What do they know about foreclosures, short sales, new tax laws, loan modifications, banks closing & changing, guidelines changing, etc?

If you are an investor: GET READY TO BUY. MAKE OFFERS AND BE AGGRESSIVE.

As a buyer or investor you don’t want to sit on the bench and watch the team bring the prices down so you can then come in and have to battle other buyers in multiple offers. If you are planning to take advantage of this real estate drop….YOU NEED TO BE THE ONE MAKING THE AGGRESSIVE OFFERS AND MAKING THAT HISTORICAL DROP DOWN TO THE LEVEL YOU PUSH IT TO.

This is what I deal with today and will be dealing with tomorrow (for the next 1 or 2 years)….many banks are willing to sell a property to the first person who makes a bid.

So don't bother listening to negative news. It's time to take that chance down the double diamond. The only difference is you won't break a leg, instead you'll have an opportunity in making a great investment.

Question is…who is going to make it drop? Answer: buyer's demand.