We’re sure you have heard the chatter. “We are in a recession;” or “Brace yourselves, a recession is ahead.” We’ve put together a few “Recession & Real Estate Legal Pointers” to help put your mind at ease.
- Don’t panic. Real estate is cyclical. This means that it tends to go up in value over time. Panic selling should be avoided, and we’re certainly not in a panic sell market by any means.
- If one does need to sell, make sure to have real estate professionals assist to ensure seller disclosure obligations are complied with and to confirm that the sales process goes smoothly. Remember, the primary reason why sales are slowing down is because interest rates just increased, making it harder for some buyers to qualify.
- If a homeowner cannot afford mortgage payments, they should consult with counsel to determine if the property qualifies under Arizona’s anti-deficiency statutes. If there is a short-term drop in real estate prices, properties could go “under water” – meaning that the mortgage balance might exceed the fair market value of the property. If this occurs, the homeowner/borrower will want to review all of the available legal options.
- A housing crash is VERY unlikely, but a “correction” is probably coming, which means houses would be less overvalued, more homeowners will qualify without a PMI and rates are likely to drop back down to realistic numbers in the near future.
For more clarity, we urge you to read this related article on Insider.