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How do you answer the following Buyer question?

"Should I buy now or should I wait?"

Everyday real estate agents are asked questions regarding buying and selling homes, and often we are also asked questions about home loan programs. But due to the market climate which we are in at this time, what is a "Proper" response to the buyer's question "Should I buy now or should I wait?"

I myself respond in this manner: If you can see yourself living in this home for at least 5 to 7 years, it will be safe for you to buy today.

I then continue to share with the buyer more reasoning for my answer almost sounding like Suzie Orman, but I wish not to bore you here with to many paragraphs with details.

My goal with my clients has always been to put aside the commission aspect of the deal, and provide straight forward honest answers so that I can keep them for life, and by gosh it works! Even though I have lost money over the years because of this belief system, I have gained many loyal clients over the years.

So, how do you personally respond to this question?

Posted by Glenn Gaspar on 08/21/2007 02:57 AM

Comments (13)

buyers, real estate agents

This post has been included in California Information

13 Comments on How do you answer the following Buyer question?

AUG

2007

Really there is no better time than to buy now, prices of houses are not going to get cheaper, in fact, right now homes are as inexpensive as they are ever going to be. Homes appreciate yearly -- buy now, that is what I say!

I agree with both of you. It is a great time to buy a house, as long as you aren't planning to move and need to sell this house in the next few years.

It is a great time to buy. There is a lot of inventory. Builders are offering all kinds of incentives including rate buy downs.Interest rates are low. even if prices come down slightly, it will be a correction but no one has a crystal ball . I know of buyers who missed out last time there was a correction. It will happen again.

I'd also add that a good buyer's agent, in this market, can get a price that will make the buyers very happy even if the market still hasn't quite reached the bottom.

Many sales prices happening now will prove to be great deals going forward no matter the short-intermediate forecast.

Buy now, rates are low, the inventory is high, prices are the lowest they have been in years.

One exception is in Ann Arbor if they are only going to be here 2-3 years, rent. We are not appreciating that fast anymore.

I don't get into crystal ball gazing. I don't discuss the probabilities or possibilities of the next 5 to 7 years. I don't dare. It is a very simple question to answer.

If you find the house you want right now and it is within your buying power right now, then buy it. If you wait, there are many possibilities that exist. Only one of the many has the house still available. You can wait a week or a month or six months, but if you do, the chances are someone else will be living in the house you wanted and you will have to choose from whatever is left at that point.

I understand that interest rates appear to be going up and I understand that home values appear to be dropping. Neither of those facts are relevant to your purchase today. Interest rates rise and fall. If they go up, history indicates they will come down again. Today's rate is the only one that matters. If rates go up, you will have a mortage at a lower rate. When rates come down, you will refinance to the lower rate. The house you want right now is within you budget. So today's interest rate is o.k.

Housing values may appear to be going down. That is another irrelevant fact today. If this homes value goes down a bit, it will be part of the overall housing market shift. It's value in relation to all the other homes will remain the same. Again, this is a temporary bump in a very long road. If you look back over the last 25 years, home prices in this area have risen at a better pace than inflation. No one expected the dramatic increase we experienced in 2002 through 2005 and no one expected it to continue.

What you have is a decision that is much deeper than the "this is the largest investment you will make" crap you hear from many circles. You are buying a home for you and your family (if single, you are buying a home). You have found the home you want.

Buy it.

jmac

It's always best to put the needs of the buyer before the commission. In the long run, you will win them over and obtain future referrals.

I always tell them that I am a real estate facilitator and not a financial advisor. I never counsel on whether to buy, or when to buy, or what to buy, but rather help them after their decision has been made. I've never had a customer come and even infer that their decision was based on my opinion and thus they hold me responsible. I want to be their Realtor for life, and every book I've read, and every class I've taken has said the same thing. Stay out of their finances, and never try to predict the housing market.

Reading this over, it sounds like I'm not nice, or even full-services. But I would like to think that I am both. I am simply very careful not to "predict" the future for anyone, since in reality, I can't do so.

AUG

2007

Glenn, that's such a loaded question. I usually throw the question back at them because I want to know what the REAL question is. "Why do you feel that it's the right time to buy?" This way, if they are ready to find that home, you will know.

It really depends on their motivation. If they need to buy and are just waiting for the market to "bottom out," I caution them against playing a game that they're likely to lose. However, if they have an issue that requires some more time, then I tell them to wait. I treat each person on a case-by-case basis.

AUG

2007

Honestly, I love you guys. You have covered it. Our opinions are just that: an opinion. Not a fact, no crystal ball gazing. Just an educated guess. Each of our individual markets vary so much as well. We all need a place to live, however. It's been historically shown it's better to own than rent. If today's market offers a wonderful home at a good price, BUY! But, please, only if you can afford it, don't over-extend.

I did just tell a seller not to sell though. Our market has not appreciated enough for him to break even yet and this is an investment home with a good renter in it. We have some great economic upturns expected in our area over the next couple years that should improve appreciation. He'd be better off just holding tight, in my opinion, for the upturns to increase appreciation. He appreciated my honesty and asked me to help him find a couple new investments. I can do that!!

Mona Lisa Matthews

The question is not should I buy, the question is which house can I buy. Economists always preach that when buying stock you should buy low and sell high. If you look at your home like an investment in stock, there may never be another opportunity to buy this low again. Most of my buyers are getting some real steals and when they do they also get everything and the kitchen sink. Why? Sellers are desperate!

I also have advised countless sellers to hold off on selling if they can until the market swings!

SEP

2007

I think your qualifying the buyer with a 5-7 year investment is a good rule of thumb. There are many other factors, too. I like to ask why they want to buy a home and how they've prepared...and, what a re they willing to give up, ie. concerts, trips, etc. Young people have a lot of discretionary money today-so much more than I had starting out. Yet, I suppose it's all relative, isn't it? Another question I ask is if they've talked with a lender yet. If not, I make sure that's the first step they take.

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