5 New ‘Rules’ to Home Buying
With signs of a housing turnaround getting stronger, housing experts say buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for home buyers:
1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a low ball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.
2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-approved for a loan to determine how much of a home they can even afford even before they start their home search.
3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.
4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.
5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.
Source: “Traditional ‘Rules’ of Home Buying Return,” US News & World Report (May 1, 2012)
Comments from Bob Karp of Karp Properties LLC: Buyers are not prepared for the changing housing market. It is still a “buyer’s market”, prices are low and sellers need to sell. However inventory is declining. In the Sierra Vista & Hereford Arizona real estate market the number of homes for sale has not diminished significantly. We are seeing less choice in certain areas and in some price ranges. Homes in excellent quality and competitively priced are in short supply. This trend may not continue, but there has been a change in the psychology of the market. Be prepared!