How to Buy a $5,000,000 Home
Posted On July 5, 2021
Home prices have soared across the U.S. as new homes have flooded into the market.
Many Americans are spending more than their fair share of their income on housing, and now that they’re buying in waves, there’s no stopping them.
That means a big chunk of the market is now at risk.
Read more from The American Conservatives.
Read MoreHome buyers will be able to sell at auction, which can offer a lower price, if they have more than 50 percent of their purchase price still in the bank.
It could mean that a home in a desirable location, like a new town or a suburb, could fetch hundreds of thousands of dollars, but a home that is in an area with very little demand could fetch a mere $3,000.
If a home sells for more than the original price, then the buyer is entitled to get some of the proceeds, but only if they’ve spent at least 50 percent.
That’s what happened in New York this week.
It’s not clear how many of the properties in the $5 million sale went to buyers who actually spent the $3 million.
Homebuyers will have to spend another 20 percent on their purchase if they don’t get the proceeds.
If they have the money to spend, they will be entitled to a 10 percent down payment.
The auction process is typically done through a bank or a private party.
It is not required by law.
However, the Federal Reserve has recently relaxed its rules, allowing for online auctions.
This year, the Fed allowed for more flexibility and opened the door for the use of third-party auction companies like Sotheby’s International.
It also eased restrictions on how much the seller can borrow.
For more on the current state of the housing market, click here to read The American Conservatory.