“You’re not going to believe this one,” my brother told me over the weekend.
He’d just gotten a bizarre call from a realtor…
[ad#Google Adsense 336×280-IA]If it weren’t my own brother telling it, I wouldn’t have believed it.
REALTOR: Mr. Sjuggerud? Um… ahem… Do you remember that place you had a signed contract on two-and-a-half months ago?
MY BROTHER: Of course. I made a cash offer, as is, at the asking price. The seller accepted the offer and signed the papers. It’s a short-sale, so I’m waiting for the bank’s final approval.
REALTOR: Uh… well… the bank rejected your offer… Apparently, the bank has moved the property from its short-sale division to a fast-track liquidation division. The property is… uh… relisted.
MY BROTHER: Really?
REALTOR: Yeah… And, well, the asking price is now lower than your offer.
MY BROTHER: The bank rejected my as-is, cash offer… and immediately re-listed the property at a lower price?
REALTOR: That’s it exactly. So are you interested in buying it… again?
The story seems too bizarre to be true.
Remember, he made a similar “as-is” CASH offer, ABOVE the asking price, on Grandma’s house.
He was rejected there, too.
What the heck is going on out there?
What’s happening out there is exactly what happens during a “V” bottom after an investment bubble has burst…
This is it… This is the “capitulation” stage. Confusion reigns. And this is where you get GREAT prices…
At the banks, the right hand doesn’t know what the left hand is doing… One part of the bank is telling its employees to get rid of real estate. And another department is trying to work things out with sellers. You don’t know which part of the bank you’ll get.
My brother seems to get the wrong department each time. But other friends have really scored…
Just yesterday, I heard from Will, a friend of a friend…
Will took my recent DailyWealth advice and just bought himself a foreclosed home that’s “in good shape” and in a neighborhood I personally know. It is a desirable neighborhood. And get this… Will said he managed to get a 30-year mortgage at a rate of 3.75%.
Let’s size this up…
- Because you’re buying a real asset with leverage (the mortgage), you now have a cheap, 30-year bet AGAINST the U.S. dollar.
- You now have a bet on an asset that is the most affordable it’s been in the history of America…
- …that you paid-next-to-nothing thing for, relative to its value or its replacement cost.
- Now you get to live in it for a few years (so you have no “rent”).
- And then you can sell it with a (hopefully) good-sized TAX-FREE capital gain… as the real estate market simply goes from bad to less bad.
Adding all that up, you could hardly do better than simply following Will’s lead, if you can swing it.
Just remember, for every deal that falls into place (like Will’s), there are multiple deals (like my brother’s) that don’t.
If the deal doesn’t work out, don’t get discouraged. At this “V” bottom moment in real estate, there’s no rhyme or reason why one deal will happen and one won’t.
Don’t blame anyone or get down. Just move on to the next attempt.
Remember, if you’re doing it like Will – if you’re buying for a place to live – only one deal has to go through. Then you’re in.
Will did it. He crossed the finish line. Now it’s your turn.
Get out there and FIND YOUR DEAL. As I’ve explained in previous essays, this is it. This is the best moment to buy a single-family home in the history of the U.S… and probably the best there’ll ever be.
So stop procrastinating! Get out there and do it! Best of luck…
— Steve Sjuggerud[ad#jack p.s.]
Source: Daily Wealth