Precautions For Buying A House In An Uncertain Market

Is it wise to buy a house when the real estate market is uncertain? This question doesn't have a single answer because there is no time when the property market will be perfect for everyone. In fact, with a few precautions, you can land a gem in an uncertain property market. Here are some of these precautions that will help you:

Buy For Long-Term Use

It is risky to buy a house as a short-term investment if the market is uncertain. You can buy a property today only for prices to plummet the next week. However, that may not be a problem if you want to keep the property for the long term. For example, if you want to make the house your primary residence or keep it for about a decade before selling it; there is a high chance that the market will have stabilized by then.  

Don't Go For an Expensive House

Once you have identified your target neighborhood, opt for a property in the lower rungs of your budget. For example, if you are shopping for a house that costs $250,000 to $350,000, aim for those nearer to $250,000 than $350,000. This will cushion you from losses should the market tank. For example, if the market plummets by 10%, you lose $25,000 and $35,000 on a $250,000 and $350,000 house respectively.

Understand That Uncertainty Will Always Be There

If you really want to buy a house, you can't afford to wait for the perfect time to do it. Sure, it pays to do your research and compare available properties, but this doesn't mean that you should wait until everything has lined up perfectly for you to make the purchase. Even real estate industry insiders rarely have everything perfect. Therefore, unless you wait forever, buy that house when everything is nearly right; delay a little bit, and things might take a turn for the worse again.

Consider the Alternatives

Lastly, you need to consider the alternatives of not buying a house and determine if they are better than buying one. For example, if you were buying a holiday home, you should compare it with the cost and convenience of vacation rentals. If you were buying your primary home, the only other alternative might be to continue renting.

You should be fine as long as you follow due diligence when buying your new property. This is assuming, of course, that you have the expertise and experience of a real estate professional to help you with the purchase.