We talk inventory and credit crunch, taxes and insurance, we try to forecast or guess. Daily we crunch some numbers to see where real estate is heading. At least we feel we have somewhat of a handle and can talk intelligently to our sellers and buyers. Surely there is a light at the end of this tunnel. Surely the economy is not going South. And then the thought occurred to me — how many property owners have maxed out their lines of credit on properties whose value is now below what the banks consider allowable? Will they come calling for a hefty payment in order for their books to look profitable? Will these owners who are already treading water be able to come up with the required monies? What about all those “Rooms to Go” schemes, buy now and pay it in two, three, four years? Back in the old days of assumable mortgages and the condo debacle, I’m talking the 80s here, we used to ask our sellers what their debt was on any given property. Maybe we should start asking that and more again.
