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IN THE MARKET TO BUY OR SELL A HOME? WHAT YOU NEED TO KNOW. . .
"It's a buyer's market!!"
"Worst housing crisis in US history!!"
"Mortgage rate have reached an all-time low!!"
Everyone has heard these exclamations flow from the lips of newscasters, co-workers, neighbors--and, quite possibly their own--over the last year. The cold, hard facts are the number of bank-owned properties has steadily increased over the past two years and many sellers are finding that their homes are sitting on the market for months, if not a year, before finding a potential buyer. At the same time, mortgage rates have dropped to a historically low level and the government issued incentives for first-time house buyers in an attempt to "jump start" an otherwise stalled housing market. And, while recent surveys have shown that the real estate market is starting to crawl back, it is doing so at a feeble rate.
At this point, you are probably thinking "Great. Once again, I've simply been presented with the same information that I've been hearing for months on end." But now comes the all-important part: what does all of this mean for YOU? As a buyer or seller, what effect does the current economic crisis have on you? What are the practical implications of the collapsed housing market?
As a buyer, you have to recognize that the analysts have provided at least one correct piece of information: this IS a buyer's market. Mortgage rates are low (very low), sellers want to move homes that have been sitting on the market for months on end and home prices have fallen, due at least in part to the number of bank-owned properties available for sale. As a buyer, you should be aware that:
* Home prices are low. You will be able to get "more" for your money than you would have a few years ago. Look for listings on bank-owned homes (they are often for sale at below FMV). Even homeowner-owned properties will likely be on the market at lowered prices. Be sure to get a full inspection on a potential home BEFORE you enter into contract, however, as people likely have less income to put into maintaining their home and often bank-owned homes have been sitting vacant for some time.
* Mortgage rates are low. You will likely pay less interest over the life of your loan as compared to what you would have paid a few years ago. However, banks are more wary of whom they will lend to. Be sure to do all you can to have a good credit score and be ready to produce documentation to prove to the bank that you have the ability to pay back the bank's loan.
* Sellers tend to be motivated due to the slow housing market. A motivated seller may be willing to negotiate on price with you. Because sellers may agree to sell at a lower price point if you waive inspection, etc., it is prudent to consult an attorney before you enter negotiations to purchase a home.
As a seller, the "buyer" information to the left may make you think that you should take down your "For Sale" sign and instead wait for the housing market to "pick up". Not so fast...as a seller, you should know that:
* Buyers are motivated to purchase now due to depressed housing prices and low mortgage rates. Be sure to market your property effectively as the number of potential buyers is on the rise. Further, companies are starting to relocate employees once again, a practice that stalled when the market began to drop; those companies are looking to find place residences for their relocated employees to live. Of course, be sure to seek an attorney's advice before signing a contract with a buyer. Be wary of negotiating with a buyer as to certain improvements without consulting an attorney.
* A well-maintained home is still much desired. Many people can not afford to maintain their homes as they could a few years ago. If your home is well-maintained, it will attract potential buyers.
AS A BUYER, YOU SHOULD KNOW. . .
AS A SELLER, YOU SHOULD KNOW. . .