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New Year Brings Opportunity for Home Shopping Bargains - 2007-12-30 |
The first two months of the year are traditionally among the slowest in the real estate industry, with sellers being advised to wait for spring while buyers aim to pick off bargains.
And with the current real estate slowdown in full bloom, I agree that this is a great time to be a buyer. If you find yourself in the position of considering a "next home" purchase, here are some realities to consider while pondering your decision:
* The Atlanta metro area is in a solid buyer's market, meaning there is more supply of homes for sale than there are buyers like you.
As a result, sellers who need to sell are more flexible than they've been in years. Don't be afraid to ask for concessions like seller contributions to closing expenses. Also, items of seller personal property, such as appliances or window treatments, may be more negotiable today than they might have been in years past.
My advice is to identify those items that would be most helpful to you in setting up your new home, and ask that they be included in the purchase price of the house.
* Don't confuse the concept of fair market value with the seller's asking price. Instead, try to arm yourself with two very important facts when considering making an offer.
First, you need to know what similar homes have sold for over the past six to twelve months. And second, you must learn what's on the market for sale today in nearby neighborhoods.
Even though the overall trend of home prices in the metro area may be headed up, it is entirely possible that the trend in your target neighborhood may be moving the other way, at least temporarily, and you can take advantage of that trend.
For example, if a neighborhood you like has recently seen a large number of homes listed for sale, that factor can drive down average resale prices until the market normalizes. If you buy during that particular down trend, you can pick up a bargain.
* Don't try to time the real estate market.
In other words, don't fool yourself into believing that prices are likely to be lower in the future than they are today, so it's better to wait a while and see what happens.
Even if home prices were falling, trying to guess when the bottom will occur is nothing more than gambling, and you can't know when we've hit bottom until after it happens.
Furthermore, interest rates are particularly attractive right now, and that won't be the case forever. Interest rates tend to go up and down in cycles, and most observers agree that we are near the bottom of this rate cycle. By locking in a fixed rate now, you guarantee yourself no increase in payments for fifteen or thirty years, whichever you choose, and you always have the option to refinance should rates dip even lower.
* Don't confuse an owner who puts up a "for sale" sign with a seller who actually needs to sell.
This is a key point. Many owners who list their homes for sale are simply testing the waters. If a buyer comes along who happens to meet their asking price, then they are willing to sell. In the meantime, if they can't get close to the price they seek, the owner is content to continue their occupancy indefinitely.
In contrast, the great bargains most often grow out of a listing where the seller is highly motivated to be done with the house, and he needs a sale right now.
A good example is a seller whose financial condition no longer allows him to keep his loan payments current, and he is facing the prospect of losing his home to foreclosure. As the days go by and the date of the foreclosure auction nears, the seller's motivation to sell increases exponentially.
* Know that the absolute best bargains to be had in this market are likely to be houses that no one else wants to own.
I recently bought a three bedroom, two bath house in a nice neighborhood in metro Atlanta for $68,500. Most homes in the area would appraise for $125,000 or more, some much more. I got a great deal on this house, not because I am a powerful negotiator. The truth is that no one wanted to deal with this house except me.
The deceased owner had moved to a nursing home several years earlier, the house was totally neglected and abused in his absence, and was literally uninhabitable on the date I purchased it. The family simply wanted to be done with the house, and could not face the task of cleaning and repairing the property in order to get closer to market value.
And here's my most important piece of advice for getting a good deal:
* See a lot of houses and make a lot of offers.
Your agent may want to kill you, but by seeing a lot of houses, you will develop a good sense for the market in which you want to live. And by making a lot of offers, you will be able to separate the sellers who truly need to make a sale from those that are merely testing the waters.
The next three to six months may offer a unique opportunity for buyers who are willing to be patient and who are willing to buy what others don't want.
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Upcoming Events
BUYING FORECLOSURES IN GEORGIA
NEW for 2008: Bank-Owned Home Bonanza
This seminar has been updated and revised for 2008 to reflect the dramatic changes in the Georgia foreclosure marketplace. We are literally facing a flood of foreclosure properties, and there is profit to be made in each and every one of these homes.
Whether you want to build a portfolio of homes for your retirement or you simply want to find a better home for yourself and your family, this program is for YOU.
LAST CHANCE THIS MONTH!!
• Saturday, Oct. 11th, 2:00 P.M. until 5:00 P.M. - Renaissance Waverly Hotel in the Cobb Galleria
This COMPLETELY NEW SEMINAR examines the roots of today's foreclosure meltdown and explains how you can take advantage of this opportunity in your spare time.
Advance Tickets: $69; bring a friend for an additional $30.
Couples share materials.
Detailed information available under the “Seminars” button
This course approved for 3 hours of Continuing Education credit by the Georgia Real Estate Commission.
The Real Estate Investor's Institute will be held at Emory University on
November 22, 23 & 24, 2008. Make plans to attend.
Detailed information is
available under "Seminars."
This course is approved by the Georgia Real Estate Commission for 12
hours of Continuing Education Credit. Agents must bring license number.
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