The Art of the Deal: Tips from Coldwell Banker Pro West for buying a home in a buyer's market
Coldwell Banker Pro West
When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interest rates remaining at near 45-year historic lows, now might be one of the best times in recent memory to buy. While today’s real estate market does offer advantages to buyers, consumers still need to be savvy in order to get the best deal they can.
Following are some things that the professionals at Coldwell Banker Pro West think every homebuyer should keep in mind:
Don’t Try to Time the Market: When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental. Once a home is priced to what the current market will bear, buyers will make offers. It is best to work with your sales associate to make an offer based upon the prices at which similar homes in the market are selling for. In a buyer’s market, there are more opportunities for negotiations, but making an offer is an important step. If you find a house you love, put your bid in and negotiate. Don’t let it sit for another buyer to make an offer.
Take Your Time…To A Degree: Although each local market is unique, the National Association of REALTORS® reports that the national home inventory is at 6.8 months. The increased supply of homes on the market gives homebuyers a great opportunity to evaluate a variety of properties. However, this does not mean that homebuyers should procrastinate. Gauge the time you may have to choose a home by asking your sales associate how long properly priced homes are staying on the market before going into the contract stage. You may find the change in days on the market from last year is just a few days longer.
Homes Are Selling: Don’t think you are the only one looking for a new home. Properly priced homes are selling. The National Association of REALTORS predicts there will be more than six million home sales in 2007, expected to be the third-best year in history. Studies such as the recent Coldwell Banker® Homeownership in America Index revealed that that majority of people move based on lifestyle changes, such as new job / promotion, marriage, divorce or family expansion.
Watch the Mortgage Rates: While it is true that mortgage rates have indeed risen over the past two years, the increase has not been so dramatic as to significantly impact a monthly mortgage payment. Consider the following example: about two years ago, mortgage rates were at approximately 5.85 percent, which translates into a monthly payment of $1,769.82 on a $300,000 loan. The current mortgage rate of 6.32 converts to a monthly payment of $1,860.32 on the same loan, a difference of $90.50. Be sure to watch the rates and do your math carefully, because changes in mortgage rates are not necessarily cost prohibitive.
Negotiate on the Incentives: Sellers eager to move their homes may offer you a variety of incentives such as cars, trips, clearing credit card bills for you and other deal sweeteners. If you accept an incentive, make sure it makes sense for you. Instead of having your bills paid, you may opt to have the seller renovate the master bathroom or install new flooring. Of course, you can always ask the seller to just deduct that amount from the list price.
About Coldwell Banker®
Since 1906, the Coldwell Banker® organization has been a premier provider of full-service real estate. In 2006, Franchise Times magazine’s prestigious Top 200 issue ranked the Coldwell Banker system number one in real estate for the seventh straight year and number eight among all franchisors. The Coldwell Banker System has approximately 3,800 residential and commercial real estate offices and more than 123,000 Sales Associates in 31 countries and territories. The Coldwell Banker System is a leader in the industry in residential and commercial real estate, and in niche markets such as resort, new home and luxury properties through its Coldwell Banker Previews International® division. It is a pioneer in consumer services with its Coldwell Banker Concierge® Service Program and award-winning Web site, www.coldwellbanker.com. Coldwell Banker Mortgage is one of the largest telephone/web based lenders in the country. Coldwell Banker Real Estate Corporation is a subsidiary of Realogy Corporation (NYSE: H), the world’s largest real estate franchisor. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate Corporation. Each office is independently owned and operated except for offices owned and operated by NRT Incorporated.