Tips for purchasing in a buyer’s market
The housing market is on a fast track downward and the real estate bubble has officially popped. This all seems like very bad news for pretty much anyone in America, whether a homeowner or not.
But one group of people is actually getting quite excited about all the news about a slow market with a surplus of un-bought homes. These people are buyers – and we have officially entered their market.
For the past five or so years, the real estate market was hotter than ever as houses were selling in days and prices were appreciating through the roof. But those glory days are over, as the U.S. economy is bracing for the impact of one of their biggest markets going under.
Now that we are in a buyer’s market, people looking to purchase a property should keep a few things in mind in order to be smart and savvy during a purchase in a slow market.
An article by Elizabeth Weintraub of about.com, “Top 10 tips to writing offers in a buyers’ market,” gives some helpful tips for potential buyers in our current marketplace.
“Simply put, buyers' markets exist when there are a lot of homes on the market and very few buyers. If inventory--the number of homes on the market in your neighborhood--has been rising, it's likely that the days on market have been increasing. Couple that with declining sales figures over previous months, and homebuyers are in an enviable position to negotiate.”
The first thing a potential homebuyer can do is completely familiarize themselves with the current market conditions in the area that they are looking to buy in. This means subscribing to listing services to get a good idea of the types of homes and their prices that are available right now.
Also, remember to tour homes that have recently been reduced or have been on the market for over 30 days. These people will be more desperate to sell, and may except lower offers than others.
If you found a home that you think you may want to purchase, always compare the prices of similar homes in the area so you know if the seller is asking a reasonable price.
“In a buyers' market, you're in control. Write your offer contingent upon the property appraising at the agreed upon sales price and on obtaining your loan. Check with your lawyer to find out if you can ask for a loan contingency that will protect you all the way to closing.”
There are countless perks for buying in a buyers market, and one is the power of negotiating. The market is painfully slow for some sellers right now, so they are more likely than ever to accept reasonable propositions and requests if it means getting the house off their hands.
“Depending on your local area, there may be fees associated with closing that are customarily paid by the buyer such as title insurance, property taxes, recording fees or escrow. In a buyers' market, you can ask the seller to pay those fees.”
Basically, during times like these, buyers have all the power in the world. Sellers will increasingly do anything in their power to entice a potential buyer to sign on the dotted line.
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