Wednesday, January 14, 2015

This is a buyer's market


Wrong!  This statement hasn't been true for about 1.5 - 2 years now.  Things have slowly been turning to where it is now a seller's market.

What does that really mean anyways?  The difference between the two is where the supply and demand is.  
                  Previously, there was an abundance of houses available and not enough buyers for them all.  This meant that the buyer was able to be very choosy over which house they wanted and were able to get the seller to agree to almost anything if they really wanted to sell their home.  A buyer's market.  
                 Now that the excess foreclosed homes have been purchased, the interest rates are down and the sellers were so scared due to media coverage, there are not as many homes that are on the market and available to be purchased.  Buyers are having to sometimes fight for the house that they want and don't always win.  Sellers are able to ask a higher price and get it, offer less upgrades and have their house on the market for a shorter amount of time.  A seller's market.

How does this affect me as the Buyer?
                 The biggest way that this leaves an impact is that the buyer now has to add in additional time.  Before the buyer was able to find a home very quickly and get the process completed in 30-45 days.  This time period of looking and bidding is now longer because they are not always going to get the first one that they are putting an offer in on and there is sometimes more negotiations than before.
                 Another thing is that they buyer has to be willing to settle a little bit more than they did before.  You can't make demands upon the seller and expect to be the winner in that battle.  When you are putting an offer in on a property, you have to bring your best offer first because you don't know how many other offers may already be in or will be following yours.  Sellers are saying No now.
                  Please be realistic!  We try to explain to you that there are a low number of homes available to choose from but you still have a very specific list of items that you are expecting us to produce, it makes us look like we are not doing our jobs when in's just not possible!  Make a list of the items that are the most important to you.  Your agent should be able to put all of the items in and slowly remove items to open up the possibilities that are out there.  Just don't give her a hard time for not being able to find you everything you are looking for in that dream home.  (You could always build new then lol)

What can help get my offer picked?
                  As I stated above, bring your best offer first.  This is not a time to give the seller a low-ball offer and think that they will give you a counter offer.  The sellers are confident enough now to say no and have no problem waiting for the next offer to be presented.
                  Make it a clean offer.  What this means is that the more requests that you are adding into your offer, the muckier it gets.  This could include items such as closing costs, appliances, window coverings, furniture, washing & dryer, home warranty, points & pre-paids, having a closing date that is beyond a reasonable time period, possession date, etc.  The more things that you ask of the seller, the more likely it is that they will say no.
                  Pre-approvals are soooooooooooooooo necessary.  Hopefully you have spoken with a lender before you even started looking for homes.  If not, shame on you because you may have just cheated yourself.  I am going to have another post dedicated just to pre-approvals so you'll want to make sure that you watch for that to see why they are so necessary.
                   Closing costs.  This is a subject that I always have a lengthy discussion with my buyers about.  Your lender should be able to give you a pretty good idea about what this number will be.  It is a negotiable amount that can usually be asked of the seller to pay to help the buyer out.  The amount differs depending on the type of loan that you get.  BUT, don't ask the buyer to pay closing costs after you have just insulted them with a really low offer.  This is not the way to get your offer picked!

I know that this isn't a complete list of everything that you should and shouldn't do, but hopefully it has given you a good idea of why this is now a seller's market and what you can do to get that home of your dreams purchased!

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