Beware of heavy discount on houses

A lot has been said about real estate rates crashing and so on. However, it is important to assess and understand the situation. We hear builders are in trouble hence they will be forced to lower prices. When a builder is in trouble, his cash flows get affected leading to the project slowing down or getting stalled. The developer generally defaults on his repayment to the banks/financial institutions. The impact is felt by the financial institutions, customers and all stakeholders including the vendors and employees. However, when a builder sells an under-construction home at a discount because he is in trouble, it just doesn’t make sense to buy in the project. There is no guarantee it will get completed. It is often said that builders are not lowering their prices because they do not want to lower their profits. This is true only in certain cases. If a project is selling and the...