By Darin Windham, Realtor,
Keyfinders Group, RE/Max Alliance
Students of financial history have noticed that economic boom and bust cycles have been happening every seven years for decades. While some have been influenced by unforeseen events, many of these cycles happened because the Federal Reserve, Treasury Department, and consumers followed the same strategies implemented for previous cycles.
From the 1980 record high-interest rates to the 2008 stock market crash, to the 2022 scenario of turbo-charged rate hikes, it’s all become predictable. However, savvy agents can find opportunities in a “down” market. For example, if you’re unfamiliar with short sales, learn how they work and when they may become an option. A short sale can occur when the owner of a property is financially distressed, and a mortgage lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property. The lender then forgives the remaining balance of the loan.
Another possibility for homeowners if they are struggling financially, is forbearance. Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances. This differs from foreclosure, where the owner is forced into default.
Finally, a loan modification is when the original terms of a loan are changed. This is not a refinance, where the original loan is replaced with a new one, but instead it directly changes the conditions of your current loan.
Ultimately, the experts say it’s important to stay focused on your goals to avoid the historic traps. And remember to take advantage of opportunities that can be found in bear markets like real estate investments.
Whether the economy becomes stronger or weaker, there will be opportunities for real estate agents. For investors and first-time buyers, you might find a motivated seller who will sell their home at a discounted price. But if you think a down market is ahead, prepare for it by learning more about short sales, forbearances, and loan modifications. And lean on your real estate agent, especially if you are faced with foreclosure. They can assist and educate you about your alternatives.
Darin can be contacted at 256-652-9032 or email@example.com
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