Reasons to buy now: housing market is a rare bargain
by Jeffrey Hammerburg
Buying a home at the end of the best selling season can mean serious price breaks at the closing table.
Price pressures continue to strengthen the bargaining positions of buyers, while homeowners are feeling more desperate to sell, regardless of how many concessions they might have to make to close their deals. With more than half a million brand new homes languishing on the market unsold and a glut of existing homes that will take an estimated eight to nine months to sell, buyers have plenty of reasons to rejoice.
Some buyers are waiting for even lower prices, but they may lose out to tighter regulations in the mortgage lending market. If you’re thinking of buying a home, it may be easier to get the mortgage you want now than it is in the near future. Government officials at every level are pushing for more stringent regulation of lenders and the banking and mortgage industries themselves are already taking proactive steps to tighten purse strings because of so many losses suffered due to defaults and foreclosures. Meanwhile the economy is sending mixed signals and the stock markets are jittery, which could signal bumpy roads ahead. If interest rates go higher or if the value of investment portfolios shrink, those who are waiting to buy a home may find themselves paying more for their loans or they may even be completely disqualified.
Another factor to consider if you are sitting on the fence about buying is that the real estate market in the U.S. is normally a seasonal and cyclical affair. The busy season is in the springtime, and that is when homes generally sell for the highest prices. As summer wears on, sellers often lower their expectations of a sale, along with their asking prices. Especially in regions of the country where heating bills are significant — in colder climates the cost of fuel to heat a home over the winter can easily range in the thousands of dollars — sellers can save money by selling before the first frost. That means that those who are shopping for a home have added leverage if they buy at the end of the summer season. Just as buying a winter coat in the springtime can guarantee deep discounts, buying a home at the end of the best selling season can mean serious price breaks at the closing table.
When negotiating the sale, here are some places to ask for wiggle room from sellers:
To be taken seriously, don’t lowball the seller but offer a price that is within five percent of the asking price. If you’re pre-approved for your mortgage or are buying with cash, this can also significantly improve your position.
If your seller assists with these it helps you qualify for better mortgage terms while saving you some serious out-of-pocket money.
If sellers are eager, you can ask them to do necessary repairs before you buy. Or have them give you a cash allowance based on contractor bids, and then do the work yourself.
Moving appliances and furniture is expensive for home sellers and sometimes they will throw those items in for free, so why not ask?
There are also other ways to save money or get extras when you sit down to negotiate. In bearish real estate markets, homeowners became rather creative with off-the-wall miscellaneous perks. During the past year, buyers in the United States have gotten free trips to Europe, cases of vintage wine, automobiles, boats and other incentives. If you can think of a commodity to help close the transaction, mention it to the seller and they might go for it. For example, if you are buying your home from a member of the city symphony orchestra or the local basketball team, you might get free season tickets. Need a riding lawn mower and see one in the garage? Maybe your seller is moving to a condo where they don’t need to cut the grass and they will be happy to toss it in to clinch the sale. Buying from a chef? Maybe he or she will give you free meals at your new favorite restaurant in order to put the icing on the cake of the sales contract.
Have your Realtor provide you with updated market info because prices, inventories and values can change quickly. The median price of American homes edged up slightly this summer, for the first time in a year. The uptick may have been caused by people pulling their unsold houses off the market — but that adds another incentive to buy now while the inventory is large and the prices are cheap.
Don’t expect to see writing on the wall when the tide turns. By the time it becomes obvious to everyone that the buyer’s market is over, it will be too late to find the outstanding bargains. If you want a home, don’t deny yourself the pleasure just to save a few bucks.
— For expert help with your next real estate purchase, contact the largest online network of real estate professionals dedicated to serving the LGBT community at www.GayRealEstate.com and www.GayMortgageLoans.com or call toll free 1-888-420-MOVE (6683).