RISMEDIA, September 17, 2010-(MCT)-As the economy continues to suffer and home prices continue to fall, numerous Americans across the country are staying away from the real estate market. But, if you are looking to take advantage of the opportunity of a lifetime, now is the perfect time to get off the sidelines. Playing by your own terms may be the name of the game today. Ask for price reductions, improvements, closing costs-whatever-and sellers, who are desperately trying to get a contract, are very likely to work with you, said Jay Papasan, one of the authors of the book Your First Home.If all the pieces are in place-you’re qualified to buy a home, the purchase makes sense for your situation and you’re prepared to live in the home for at least five years-according to Papasan and the experts at ForSaleByOwner.com, the following reasons should be motivation enough to get you back in the market.
- You have a large inventory to choose from In many places it is taking months to sell a home, which is creating a lot of inventory for those looking to buy. A large selection of homes on the market gives buyers more choices and drives down prices as well. And home sellers have gotten the picture-it’s fair to say that home sellers have become “increasingly desperate,” Papasan said. “People who have had for sale signs in the yard for six months are starting to become in tune with the reality of the situation,” he said.
- Builders are offering big discounts
Homebuilders are getting even more aggressive with their pricing today. In fact, Eddi Fadel, author of Don’t Rent, Buy! recommends looking at completed new homes first because builders are offering such steep discounts. Plus, you’d have a warranty not only on the home itself, but also on the home’s appliances, he said. “Builders want to save their credit, save their brand, save their reputation and clear out inventory,” he said. “They can go buy cheap land today with that cash.” His advice: Walk in with a preapproval for a mortgage, make an offer, then walk away without making a deal if you have to. Chances are, a builder will call back and reconsider that offer rather than let a potential buyer get away.
- Mortgage rates are historically low
It’s not just the price of the home that will affect affordability; mortgage terms will also affect your monthly payments. In fact, according to Bankrate.com’s weekly national survey, mortgage rates moved lower this week, witÃh the average conforming 30-year fixed mortgage rate retreating to 4.54%. Rates on the popular 30-year fixed-rate mortgage came in at 4.54%; 15-year fixed-rate mortgages were down to 4.00% and 5/1 ARM mortgages were as low as 3.78%. But low rates don’t mean lenders are handing out mortgages easily. You’ll still need good credit, a substantial down payment and a willingness to document your income in order to qualify for these great rates-if you can qualify at all. In addition, low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. This allows new homeowners to have a little give to absorb any ups and downs as housing market continues to gain traction.
- Houses are in move-in condition
Many homeowners have decided to wait out to the market and instead stay in their current home and take care of home improvement projects to make the home feel like new again. Because of this, many homes coming onto the market today are in good condition and ready for buyers to move in.
2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
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