Many things are cheap now… does that mean you can afford them? The reduction in everything homes to  cars and even luxury goods make it tempting to make a purchase. Can you really afford the item? Lets say you couldn’t afford a house for $300,000 but you can afford the same house that has decreased in value to $200,000 or less right? It depends on the condition. If the house was a bank owned house in good condition without any major problems then the reduction in price is a good thing. 

On the other hand if you decide to make a purchase such as a home, buying it as is, especially if it is a bank owned or foreclosed property can be costly to make repairs to the property.  Fixtures may be missing, or broken and can be costly if you don’t have money set aside to make the repairs.

Buying something new at a reduced price, you still need to be able to maintain your purchase – even if it is an expensive suit that needs to be dry cleaned.  There is a cost involved. Realty Trac offers a REO buyers checklist which includes inspecting the property, negotiating and financing.

In areas with a surplus of properties, realtors or banks are willing to make deals on properties so that they can get rid of them, but that doesn’t necessarily mean that the price will be dirt cheap. After the purchase this does not mean that the property taxes have decreased with the price either. The taxes may still be set at the rate for the original price.

Buying real estate that has essentially been repossessed is different than purchasing a repossessed Rolex or car. You pretty much know what you are getting up front. A car can be checked out by a mechanic. Plus, repairs and maintenance would be less than for real estate. Even if you buy a builder’s closeout, negotiate. You might not be able to get the price decreased, but you can see if you can get some additional things thrown in for the price you pay, such as higher quality materials, landscaping for a house, or a parking space for a condo unit.

You  never know until you ask. Asking when you are the buyer with power can net you some great returns.