How can buyers find their way in the current marketplace, with its shifting home prices and an extensive inventory that includes many distressed properties?
-Looking enough to get to know your local market. Don’t be mislead by your own inflated expectations. Each local market has its own character and you must adjust your expectations accordingly. Otherwise you will continue look for a home that doesn’t exist. Do a fair amount of looking to get an understanding of the market and the confidence to make a decision.
-Let your emotions help you. Too often today, buyers aren’t letting themselves fall in love with a home. Leaving emotions out of the equation makes it difficult for a buyer to commit to a purchase. Looking only at price and condition contributes to uncertainty.
-Decide if a distressed property is really right for you. Foreclosures and short sales offer great value when it comes to price per square foot, but these properties tend to have their own limitations. Foreclosures often, though not always, have serious condition issues and are almost always sold “as is,” meaning the seller won’t do any repairs. As a result, buyers may need to carry out extensive repairs after purchasing. Short sales, while usually in better condition, can take months to get to the closing table, and in at least some cases these transactions eventually fall apart because the lienholder, seller and buyer can’t agree. As a serious buyer, you must decide if you have the patience and flexibility to pursue a short sale and the skills or resources to deal with repairing a foreclosure..
-Don’t focus too heavily on price. When you focus exclusively on price you may fail to consider the other benefits of purchasing—the tax deductions you get when they own rather than rent, the amazingly low mortgage interest rates currently available and the benefits of living in a home and a community that fit your family.
-Be ready to negotiate. You can miss out on a great home if you don’t initiate a negotiation. When you find a home you like, make a reasonable offer at a price you are comfortable with, even if it is well below the listed price. At worst, the seller won’t negotiate, but in this market that is unlikely. Sellers don’t want a viable buyer to walk away. If a negotiation is initiated, it often ends up in a place that makes the buyers happy because in this market sellers have to do most of the compromising.
-Get plenty of advice but trust the professionals. The current housing market is complex and can be confusing. Not all the advice has equal value. Talk to friends and family about a potential purchase, but at the same time, that advice should be taken with a grain of salt because unless the advice comes from a local real estate professional—a lender, agent, inspector or appraiser—it won’t be grounded in detailed knowledge of the current market.
-Don’t let negative comments about the housing market scare you off. Those who mean well may wish to warn you about the downside risks of the housing market. Don’t lose sight of the many positives in the current market, such as the fact that home affordability is at its highest in decades and that investors are flocking into the market to snap up bargains in all-cash purchases. Focus on the numbers that directly impact you—property prices, interest rates and how those translate into monthly payments.
illed by any means. In fact, things are decidedly looking up: July got some good news, when the National Association of Realtors reported that pending home sales rose 5.2% from downwardly revised June levels, beating economists’ expectations. This is good news for both buyers and sellers.