THE BEST TIME TO BUY?
Is the buyer the winner in today’s real estate market?
Visit any website, pick up any newspaper or magazine, and the news about real estate is negative. But let me suggest something positive: right now may be a great time to get into the real estate market. Whether you want to buy your first home or explore real estate investments, conditions haven’t been this favorable for buyers since the early 1990s.
All the advantages are yours. First of all, there are plenty of properties on the market, and scores of sellers hungry for any respectable offer. In fact, many sellers are realizing (sooner or later) that THEY need to be competitive with other sellers in their neighborhood, so sale prices are trending down. If you want to buy a new home, you might find builders offering you some great incentives – such as no payments for 6 or 12 months, or custom features at no charge. And while mortgage interest rates are a percentage point above where they were two or three years ago, they are still historically low.
Leap in, or look? Some people are tentative about buying right now because they think home values might fall further. We have no way of knowing that; no one is clairvoyant. So while it is sensible to be patient, it is also advantageous to be active. If you see the house you want and the price is fair, you may want to give up trying to predict the future and simply make an offer. Consider looking for a home you can grow with, should prices drop more.
Exploit the Web. If you’re serious about buying, absorb some knowledge online through Zillow and RealtyTrac. Zillow is a valuation site that can give you a reasonably accurate estimate of a home’s value (though it calculates value without the “inside knowledge” of your local market conditions that a living, breathing real estate agent possesses). RealtyTrac is a great place to find foreclosures and to take a look at foreclosures in different regional markets.
Negotiate. If you love a house but feel the price is too high, gather evidence before you submit your offer. If you can show that four or five comparable houses within a few blocks sold for thousands less than what the seller wants, your lower offer gains credibility. You can even bargain with your real estate agent. Some states permit buyer’s agents to offer buyer’s rebates at closing, where they can give you back part of their commission. If you’re using an agent, it may be wise to hire a buyer’s agent who represents your interests, without a commitment to the seller.
Go traditional. If you can put 10% or 20% down, do it. Avoid interest-only loans and other exotic mortgages. Lastly, don’t be swayed by trinkets such as “free trip to Hawaii with house” or “free 2004 BMW with house”. Don’t laugh, it’s actually happening. Focus on the value and potential of the property.
Real estate is in a slump, but this may be the best time to buy for you. Talk to a qualified real estate professional who can show you the range of options in the current market. You might be pleasantly surprised at the affordability, and by the power you have in this buyer’s market.