Yahoo Article "5 new rules for home buyers"
I can not make it any clearer for Home Buyers out there.
Rule 1: You can't time the bottom
If anyone could time the bottom, then that person must be rich. If someone is telling you to wait till the market bottoms out, here are some reasons you should consider before you take the advice.
•· Currently there is a high inventory of homes on the market. The higher the supply, the lower the demand. Basic economics!!
•· Great Selection!!! Sellers have to compete for the buyer's attention. Listing prices are dropping closer to the sales prices.
•· Extensive Property Features. Some of the homes out there have been updated with the modern amenities that most Home Buyers want. There are more "Turnkey Homes" out there than fixers.
•· Single Offers. Few years ago, a home would be listed for 1 day and have multiple offers on it, thus driving the price up. Today, Home buyers are writing offers and having only the seller to contend with, thus no other offers to drive the price up and gives leverage to Home Buyers to offer less than list price
•· Sellers are willing to pay closing cost. More Sellers' are providing incentives to Home Buyers to buy their home in this "Buyer's Market". Some are paying for closing cost, repair work, remodeling allowances.
•· Lower Deposits are required. Because sellers are seeing fewer offers on their properties, they are not asking for large Good Faith Deposits.
Rule 2: One reason to buy now - mortgage rates
If waiting for the market to bottom out is still your plan consider this:
•· Right now, record low interest rates!!! It is true; we are still in a credit crunch. However, change is taking place. Money needs to become liquid, so the government stepped up to balance the economy and lowered the FED's Borrowing rate for Banks to borrow from. Consumers are benefitting from this with great rates on some great loan products.
•· REO (Bank Owned Properties) have money tied up in them. Banks do not want to have homes in their portfolio, they want money, and The FED's Borrowing rate is great for them to recover some of their losses from the Sub-Prime blow up, by borrowing from the fed and keeping a profitable margin for themselves to recoup their losses.
Rule 3: Another reason to buy - rates on big mortgages
If you are still waiting for the market to bottom out, consider these points:
•· Homes that have over $750,000 or more on mortgage loans, Owners with these homes that have High Limit loans are REFi'ing to a better rate than they had today.
•· The Housing Market for million dollar homes has suffered minimal loss. Million dollar + homes have not suffered from this credit crunch. They have a healthy Inventory and have a Healthy Demand. Again, basic economics.
Rule 4: Don't buy cheap; buy good schools
Still waiting? Consider this.
•· Most buyers that are buying are not buying for investment; they are buying for the long term gain. Good schools, good cities, good neighborhoods are what buyers are buying. The quest for financial gain is still a priority; however, buyers are buying for the simpler reasons like raising a family, buying a bigger home for the same payment, getting into that neighborhood that they couldn't afford a few years ago. Buyers know that Real Estate is the safest investment that you could invest in. Most Buyers today, also know that eventually they will gain more equity 5 to 7 years down the road by buying today. See, they know that the market can still decline, but would they have gotten the same home for the same price, with the same incentives, for the same rate, for the same monthly payment if they were to wait till the market bottomed out?
Rule 5: Make sure your agent has your interest at heart
This rule is very important! Consider this:
•· Real Estate Professionals have help 98% the total Sales of Real Estate in our nation. Having a Realtor on your side can not only help you find your next home, A Realtor can guide you on making the right decisions. Sitting down with a Realtor before jumping into his or her car can save you time, energy, and lots of money. So, hire a professional that has an idea of what you want and they will have your best interest at heart.
Today's Real Estate market has tremendous Opportunities for both Buyers and Sellers. Ask me how you can take advantage of Today's Market.
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