A powerful quote I’ve heard from many sucessful people comes from Warren Buffet:
“Be fearful when others are greedy. Be greedy when others are fearful.”
Source I heard it from: TheKirkReport
I’ve recently spoke about how I’m buying a house, and about to get financing for it. Well I’m doing a double take after really looking into this. I have no doubt the area I’m buying in will be developed like crazy in the coming years, but there’s a little problem lately: All those financing problems in the sub-prime market.
I look at it this way:
There’s currently huge problems in the financing world, many lenders are going bankrupt (even some big ones) and the last few years have been a lending-spree for them, meaning people that really shouldn’t have got large loans were getting them with ease. This obviously means almost anyone interested in buying a home could. Which means increased home demand, which means increased prices.
So at the very height of these years of steadily increasing prices and easy lending practices, I’m actually BUYING right now??? Hmmm…
What I’m trying to say is that some of these people with wacky loans will eventually fall….and that means foreclosure. I feel I’d rather hold onto my cash right now and scoop up a home in a year or two when others start getting desperate to sell.
A family friend of mine who I highly admire for his real estate accumen through the decads sold almost ALL his holdings about 2-3 years ago, when things started getting really hot. I asked why he sold everything, because ever since I’ve known him he’s had multiple holdings and deals concurrently going.
He said, “I’m waiting till 2008 or 2009 when all the foreclosures start happening.” Keep in mind he told me this about 3 years ago.
I see what he’s talking about now. The way this man has made his wealth is by getting DEALS. I’m getting pretty much a standard rate on this new homes, not even a “decent” deal, and definitely not a bargain price.
So for now I might be backing out of buying the home. All I had to do was put down $500 for the deposit, and if for some reason I couldn’t purchase the house, I get it back. Since the last month they’ve yanked the financing option I was planning on doing, so because of that, I’ll be requesting my $500 check back from Centex and the whole deal is off.
Not a bad learning experience….and this time it was actually free :-)