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Are you thinking about buying or selling your home? Do you know someone else who is thinking about buying or selling a home? Many people have recently asked me if I believe it is a good time to buy or sell considering the market we are in. First off let me start by saying that the real estate market is not crashing and burning as of right now. The bubble is not bursting yet as some have predicted would happen. Instead we are simply transitioning into a more normal market. Many of the homes that are listed are sitting on the market longer than comparable homes were last year and the year before. However, people are still buying homes and people are still selling homes as people always will. In my opinion, houses that are priced under $400,000 and have good curb appeal are still red hot in this market. That being said there are a few things we must bear in mind if we will be buying or selling anytime soon.
Sellers must be prepared mentally and financially to allow more time for their home to be on the market. Being that there are an increased amount of homes on the market now, it might be a good idea to accommodate more open houses. You and your agent might even consider hosting midweek open houses to get your home more exposure. Another important thing is to consider is how your home looks from a buyer's point of view. Is there clutter all over the counters? Are the walls or floors dirty? Does the outside yard need some serious attention? This is where staging your home for the sale will make a huge impact. With some simple changes and elbow grease you can make your home look much more pleasant to the eye. Lastly, a seller must be ready for a longer listing period. Unless your home is in the low or middle $300,000 range you will probably be in for the long haul. According to recent figures the average DOM (days on the market) for a typical home has doubled since last year from 18 days to 39 days. This is as a result of an increase of available inventory and a decrease in the occurrence of "bidding wars." For the most part, these "bidding wars" in which multiple full price and above full price offers stream in within a few days are not happening any more. So if you are a seller be patient and prepare yourself for a longer listing period.
Buying a home right now has its own unique set of challenges but it is not impossible. Although interest rates are still at a historic low, the biggest challenge that first time buyers may face is getting into something that they can afford. This is where working with an HONEST reputable lender comes into play. There are so many horror stories including many I have experienced first hand regarding lenders. This is why it is crucial for any buyer to do their homework when choosing a lender. If it seems like they are lying, they probably are. If it seems to good be true, it probably is. If they do not call you back in a timely manner, get rid of them. Look for the lender who is willing to work hard for your business. And, I cannot emphasize the importance of honesty in the real estate transaction. You need a lender you can trust. Ask your agent to give you the contact information of a few lenders that he or she can trust. By interviewing a few lenders, you can get a feel for who you trust and want to work with. Another thing that every buyer must be aware of is to do their homework when choosing a home. I remember when my wife and I were looking for our first home; we fell in love with the first ten houses we looked at (every one of them). However, when reality set in, we quickly realized that we needed to be sensible about what we were looking for in our first home. Choose a home that you will be comfortable living in but use caution not to overextend yourself on what you are spending.- And, be patient to find the best deal possible. Ask your agent to place you on an automatic e-mail program so you can receive a direct update from the MLS immediately when new properties become available that fit into your criteria. This is one of the most efficient ways to stay abreast of the new inventory available. In addition, make it a point to periodically drive through the neighborhoods that interest you and even stop through open houses to get a better feel for the homes and how they are priced. Lastly, the most important thing I can suggest to potential buyers is to BE READY. You must realize that when you find that "Deal of the Century," you will probably be competing with other people who are on a search for the same thing. Have your lender prequalify you before you start putting in offers. This will tell you what you can afford and will take the guesswork out of establishing your price range. Your lender should forward a copy of your prequalification letter to your agent. When your agent presents your offer on a home, the other parties involved will see that you are a strong buyer because you have already been preapproved for a loan and therefore they will have less concern for the deal to fall out of escrow. It is also important to make sure you have some funds set aside for your good faith deposit (at time of offer) and your closing costs (at close of escrow). Your agent can tell you based on your purchase price what amount (Estimated) you will be paying for these and will give you a sheet called a "Buyers Closing Cost Summary" for your records. Preparation is the key.
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