Four Step Plan for Solving the Foreclosure Crisis Essay

1055 Words 5 Pages
The foreclosure crisis is not something that just happened overnight, this is an opportunity that has been in the making even before people began using banks to buy real-estate. Many homeowners bought into a house that was much more than they could afford. Many bought houses that were overpriced therefore paying too much for something that just wasn’t a good deal. Builders were building $40,000 homes and selling them for 150,000 homes were being built with poor insulation, cheap building materials. When purchasing a house to live in, they might have been led to believe that this was the deal of a lifetime. Many homebuyers, at the time of closing will get very excited at the fact that they a making a major purchase, an investment that …show more content…
It seems to me that people are not aware of property tax increases, and insurance rate increases both of which will affect your monthly payment. In some states, the city has the ability to increase your taxes as much as 10% per year, which means, that a home that you buy today at $100,000 you could be paying taxes on $161,051 in about 5 years at a 10% yearly increase, now let’s work that 10% for another 5 years your property taxes could be based on $259,374.25 ouch!!! however, if you try to sell your home at that price, in today’s market chances are that it will be sitting on the market for a long time… it is JUST NOT GOING TO HAPPEN. What is your strategy for this? One strategy is to ask for 50% off the asking price and just submit your offers. This way you have a better chance of not foreclosing on your purchase. With proof of funds you should be in good standing to make a good profit when you decide to sell. Robert Kiyosaki the author of Rich Dad Poor Dad says that you make your profit when you make the purchase, not when you sell it. Another solution is to limit the amount of tax increases to less that 2% per year or maybe tax increase of 2% every five years. I don’t know any person that has a job

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