I won't call it an epidemic, but lately I have seen and heard of a few instances of buyer's missing out on homes that they really want by simply not making an offer.
Don't get me wrong, I understand this is a buyer's market and that everyone is looking for a great deal, I just don't think some people understand that there is a point where it's not worth selling a house. Each case is unique and the more you understand the specific situation of the property you have interest in the better decision you can make.
Here are some things you should think about when searching for your home.
- Assume your new home will not be worth what you paid for it in a year! -- While this may or may not be the case, the truth is that it only matters if you plan on selling in a year. Whether we have hit the bottom or not, most agree that we are close and that within the next 2-3 years we should start to see prices start to climb. Here is a very interesting Chart showing how all Massachusetts Communities have done over the last 10 years even with the huge decline in prices.
- The best way to get a price reduction is to make an offer! -- No buyer feels that they should pay the asking price unless there are multiple offers in. For this reason sellers are reluctant to drop prices figuring that a $10,000 drop is going to turn into a $15-20,000 drop. Make your offer! At least you will know if they are serious or not.
- Sellers are not Banks! Seller's have a plan in place. They want to upgrade, downsize, relocate or whatever.... These plans rely heavily on what they will get for their current home. I have seen many give it the old college try to make their plan come to fruition. If they can't use the equity or absorb the loss based on the market, they stay put and wait to play another day.
- Showing that your serious can save you a couple of bucks! Pre-approval letters don't get anyone overly exited anymore. Too many deals have been squashed once the underwriters get involved. Cash is King! Larger earnest money deposits and second deposits will show that you are serious. Showing that you are willing to come up with a larger down payment can be the difference of having a lower offer get accepted over a higher offer that has to go through the FHA guidelines.
- Timing the interest rates can be more important than that last counter offer! Even a slight increase on interest rates can cost you more than you think. If that increase happens while you are squabbling over another $5 - 10,000 on the price, you could be hurting yourself in the long run.
There are some great deals out there and there is no excuse for an educated, qualified and willing buyer not to get one. Those that feel you can get a new Mercedes for the price of a used Saturn will remain on the sidelines looking at houses that they will never buy.