When Will it Be the Buyer's Turn?
There has been a good deal of talk about the market cooling. Does this mean it's currently the buyer's turn in profiting from market conditions?
A buyer's market occurs when sellers have minimum power at the negotiating of the sale of a house. The purchaser has an advantage because there are more houses to choose from. Home prices may also be down because of the negotiations of shrewd buyers.
Are we heading for a buyer's market? Some areas have shown signs that we are. In many places, home sales have slowed down. Homes are staying on the market more. The longer a house is on the market, the sellers need to be more willing to negotiate.
Not only is that the stock of houses available moving up, but the home prices in certain regions have stopped increasing. A couple of areas are in fact experiencing decreases in home values.
You might be saying that interest rates are working against buyers, but this isn't necessarily true. Interest rates still remain at a fairly low level. What this signifies is that the ordinary person can still afford to get the average home.
In actuality, interest rates help to create a buyer's market. With interest rates increasing, many homeowners are having monthly payments on their adjustable-rate mortgages. Some homeowners who bought in the peak of the market are only now having their mortgages adjust. There are reports of payments doubling in size for some borrowers who took out risky loans.
Foreclosures are on the rise. People just can not afford their houses any more. They must sell and they must market fast, before they are foreclosed on. With a growing number of homes popping up for sale, buyers will have a lot to select from.
All these conditions give buyers an edge in the real estate transaction procedure. Buyers don't need to jump onto the first home they see because houses are no more few and far between. Oftentimes, bidding wars will not be a problem. Numerous offers may still happen, but buyers are likely to be a bit more relaxed. Needless to say, this is in general -- there will still be neighborhoods and areas which are experiencing plenty of buyer demand.
If you're taking a look at buying a house in a place that's experiencing a slow down or buyer's market, you can use items to your benefit. Learn your vendor's reason for selling. It might be that time is of the essence, giving you an edge. If there are any contingencies which you will need to incorporate in the contract, now's the time. Sellers that are having difficulty selling their houses are more prepared to do what's necessary.
Do not forget to have the property appraised -- and be certain there is an appraisal contingency in your contract. If you are in a place that's experiencing fast dropping home worth and your final is a few months away, I'd go ahead and have the property assessed for another time near closing.
You also need to have the property inspected by an expert. This should occur in both buyer's and seller's markets. You would not buy a car without a test drive, so be certain you look under the hood of the house.
Buyer's markets are amazing for buyers. If you're in the market to purchase a home, focus on the home sales in your area. But don't fret too much about the current market, what counts the most is buying a wonderful house which you can afford.