We all want to know when is the best time to buy and sell a home. It’s only natural, especially during a housing recession where homes prices are downspiraling. In a down market, everybody wonders how low prices will go and faces the dilemma whether to buy and sell now or wait a little more.

The more important question when buying and selling a real estate during a recession is not how low can prices go but how to capitalize on falling prices. Here are some strategies that might help you arrive at a good decision and take advantage on falling prices.

Buy immediately

Many people are probably thinking: "Of course, a Realtor would say that, and real estate agents always say the best time to buy a home is as soon as possible" Well, here’s why: If you’re a seller who desires to move up to a much more expensive home in during a housing recession, the best time could be now. The price of your home could fall if you wait longer to sell.

It’s also best to sell now if you’re capable of arranging alternate housing. Wait for a few months and then buy a new home. If you simultaneously buy and sell, you’ll still have a good game since the price reduction on your purchase is much greater compared to the loss on the sale.

Consider the "loss" and the "real profit"

Say your present house is worth $400,000, but due to few buyers and high inventory, you must slash your price by 10% – instead of receiving $400,000, you would get $360,000 and "lose" $40,000. Say you purchased your home 10 years ago and paid $150,000. You’re still ahead $210,000, less costs of sale.

Consider the amount you "save" on purchasing a new home

If you’re planning to move up to a home worth $600,000 located in the same down market, you could purchase that house at that same 10% discount or $540,000. This would mean that you had saved $60,000. Let’s review. So you "lost" $40,000 selling your home but "saved" or "made" $60,000 on the purchase of a new home. That puts you $20,000 ahead.

Consider the differences interest rates and purchase prices

Say you put down 20% and pass for an 80% loan, you’ll pay $2,554 for $425,000 sales price at an interest rate of 8.25% interest, $2,579 for $450,000 sales price at an interest rate of 7.75%, $2,592 for $475,000 sales price at an interest rate of 7.25%, $2,594 for $500,000 sales price at an interest rate of 6.75%, and so on.

A good strategy when buying and selling a home during a recession is to weigh all the positive and negative points of real estate ownership before deciding whether to buy and sell.