Buying in a Buyer's Market
TIPS FOR BUYING A HOME IN A BUYER'S MARKET
When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interested rates remaining at near 45-year historic lows, now might be one of the best times in recent memory to buy a home. While buyers have the advantage in today's real estate market they still need to be savvy in order to get the best deal.
Here are some things for your consideration:
Don't Try to Time the Market: When home prices are low, it is very tempting for buyers to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental. Once a home is priced to what the current market will bear, buyers will make offers. It is best to work with a buyers agent to make an offer based upon the prices at which similar homes in the market are selling for. In a buyer's market, there are more opportunities for negotiations, but making an offer if there is interest is an important step.
Take Your Time...To a Degree: Although each local market is unique, the National Association of REALTORS reports that the national existing home inventory is at 10.4 months supply. The increased supply of homes on the market gives homebuyers a great opportunity to evaluate a variety of properties. However, the does not mean that homebuyers can procrastinate. It is smart to ask your buyer's agent how long properly priced homes are staying on the market before going into the contract stage. Ask them to share a Absorption Market Report for you.
Homes Are Selling: Properly priced homes are selling. The National Association of REALTORS predicts there will be more than six million home sales in 2009, expected to be the third-best year in history. Studies such as the Coldwell Banker Homeownership in America Index reveal that that majority of people move based on lifestyle changes, such as new job/promotion, marriage, divorce or family expansion. These changes will continue to drive home purchases.
Watch the Mortgage Rates: While it is true that mortgage rates have risen over the past few years, the increase has not been so dramatic as to significantly impact a monthly mortgage payment. Be sure to watch the rates and do the math carefully, because changes in mortgage rates are not necessarily cost prohibitive. In some cases 1% increase in mortgages rates could mean 9% more of a down payment will be needed for a purchase.
Negotiate on the Incentives: Sellers eager to move their homes may offer a variety of incentives, such as cars, trips, clearing credit card bills and other deal sweeteners. Before accepting an incentive, make sure it makes sense. Instead of having bills paid, buyers may opt to have the owner renovate the master bathroom or install new flooring. Buyers can also always ask the seller to just deduct that amount from the list price.
When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interested rates remaining at near 45-year historic lows, now might be one of the best times in recent memory to buy a home. While buyers have the advantage in today's real estate market they still need to be savvy in order to get the best deal.
Here are some things for your consideration:
Don't Try to Time the Market: When home prices are low, it is very tempting for buyers to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental. Once a home is priced to what the current market will bear, buyers will make offers. It is best to work with a buyers agent to make an offer based upon the prices at which similar homes in the market are selling for. In a buyer's market, there are more opportunities for negotiations, but making an offer if there is interest is an important step.
Take Your Time...To a Degree: Although each local market is unique, the National Association of REALTORS reports that the national existing home inventory is at 10.4 months supply. The increased supply of homes on the market gives homebuyers a great opportunity to evaluate a variety of properties. However, the does not mean that homebuyers can procrastinate. It is smart to ask your buyer's agent how long properly priced homes are staying on the market before going into the contract stage. Ask them to share a Absorption Market Report for you.
Homes Are Selling: Properly priced homes are selling. The National Association of REALTORS predicts there will be more than six million home sales in 2009, expected to be the third-best year in history. Studies such as the Coldwell Banker Homeownership in America Index reveal that that majority of people move based on lifestyle changes, such as new job/promotion, marriage, divorce or family expansion. These changes will continue to drive home purchases.
Watch the Mortgage Rates: While it is true that mortgage rates have risen over the past few years, the increase has not been so dramatic as to significantly impact a monthly mortgage payment. Be sure to watch the rates and do the math carefully, because changes in mortgage rates are not necessarily cost prohibitive. In some cases 1% increase in mortgages rates could mean 9% more of a down payment will be needed for a purchase.
Negotiate on the Incentives: Sellers eager to move their homes may offer a variety of incentives, such as cars, trips, clearing credit card bills and other deal sweeteners. Before accepting an incentive, make sure it makes sense. Instead of having bills paid, buyers may opt to have the owner renovate the master bathroom or install new flooring. Buyers can also always ask the seller to just deduct that amount from the list price.
Labels: Articles, Buying in a Buyer's Market Tips
