Saturday, August 08, 2009

Negative Price

Home buying is no walk in the park even in the best of times and these days the process seems to be fraught with even more unknowns and variables. When you read that at some point, a prospective buyer of a condo could actually get paid by the seller so the property is off their books, you have to wonder what else is left to see.

If is makes sense for the seller to pay someone to take ownership of their property, logically,it must not be a good deal for the buyer even at a negative price. Do they then wait a little longer to see if better inducements to come along - maybe someone will throw in a late model car in as well so they can get rid of the condo.This Bankrate article has a succinct analogy for
negative equity which makes it easy to appreciate how hurtful it can be :

Having negative equity is like walking on a treadmill with an injured knee. You don't get anywhere, and it's painful. If you're lucky enough to be financially solvent, that puts you in the enviable position of being able to make the house payments, even though it feels like you're throwing hard-earned money into an abyss.

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