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Monday, July 11, 2011

Cheap Deals in the USA... caution is key.

There are a lot of cheap real estate deals in the USA right now, thanks to the real estate market there collapsing back in 2008. Even now the United States economy continues to struggle and housing prices have yet to recover.

Thus you could get a small 9-acre farm with a 3 bedroom, Florida home for $360,000 USD... prime real estate, yet cheap by Canadian standards.

Or you could buy your dream home in Arizona for $276,000 USD... about 60% below the home’s peak value of $650,000 in 2007.

But these cheap / prime real estate deals don't come without a healthy dose of caution, so here's some advice I found for people looking to buy real estate in the USA.

1. A “site-built” house, i.e. no mobiles, modulars or prefabs, which are harder to insure and resell.

2. Look for places with plenty of space. You will appreciate this later.

3. No renovations necessary and sufficient space for everyone.

4. Look for places with easy access to local amenities and attractions, especially if you're just visiting there in the winter. ie. state forest trails.

5. Offer a price of $300,000 maximum. Anything over that and they're still dreaming of 2007 prices.

6. Make your offer conditional on insurance, an increasing problem in some states with so many major insurers no longer writing new policies. If you’re a Canadian snowbird the insurer may insist on a security system.

7. If you offer on a short sale, foreclosed or auction property, make it clear you want proof that the offer has been presented.

8. Don’t buy thinking you’re going to make a killing; buy because you love it and plan to use it for years.

9. Don’t assume the property tax on the listing sheet is what you will pay. There are a number of state exemptions for permanent residents and U.S. citizens.

10. Look at hundreds of homes online using the local multiple listing service, and then pick dozens of open houses in all price brackets to get a feel for the local market.

11. Eliminated from your list homes that were more than 10 years old so you don’t spend precious vacation time doing renovations.

12. Remember to count your blessings you live in Canada where we have a stable economy.

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