“A Buyer’s Market”—Four Tips for Buyers
Everyone’s saying it’s a buyer’s market for real estate today, but what does that really mean to you?
Yes, it is a wonderful time to buy a home, an investment property, or land. Mortgage rates are at record lows. While mortgage lenders are still stricter than they were before the mortgage crisis, many are loosening their requirements, so it’s getting easier to secure financing. Real-estate prices are low, overall, but starting to recover, making for excellent investment opportunities. Many sellers are eager to sell.
Still, this does not mean that a buyer can do no wrong. In her blog post, “Who Told You It’s a Buyer’s Market?” Realtor Carol Culkin tells stories of buyers who have tried to push the “buyer’s market” too far. She’s had clients ignore her advice, insulting sellers with extreme lowball offers and extravagant demands, and those clients have lost deals because of it. The moral of the story: Even though the market favors buyers now, buying real estate is still a negotiation that has to consider the needs of both sides. To get a good deal, you still need to do your homework and negotiate fairly. Here are four tips for doing just that:
1. Know the reality of the home or property you’re looking for. Is your dream property in a “financially distressed” area? Is your seller desperate to sell? It’s all right if they’re not—in fact, that may mean you’re buying better quality real estate. Find out what position your seller is in, whether they’re eager to sell or able to wait for a better offer. Find out the fair market value of the property, too, and plan your offer based on it. Keep in mind that figures for fair market value include the current low housing prices. Fair market value is already a good deal for you. Lowball offers far below that will most likely lose you the deal and waste everyone’s time.
2. Know the reality of your own situation. How well are you set up, financially? Even though it’s a buyer’s market, securing financing early on will help your bargaining position. If you must, you may be able to get concessions such as a low down payment or help with closing costs, but keep in mind that these weaken your position. Even though the housing market favors you, it helps to be an attractive buyer.
3. Put yourself in the seller’s place. Yes, you should be looking out for your own interests, but keep in mind where the seller is coming from. Is your offer a fair deal for them, given the circumstances? As many have said, “It’s a buyer’s market, but not an idiot’s market.” In today’s housing market, you can get an excellent deal and still treat the seller fairly. Make an offer you’ll all be happy with.
4. Find a buyer’s agent you can trust, and listen to them. This is the key to the three tips above. A good buyer’s agent knows the area you’re shopping in very well. For example, the agents at San Juan Realty know the southwestern Colorado communities of Ridgway, Ouray, Montrose, and Telluride inside and out, and can tell you how property is selling in that market. A good agent will also have excellent research skills and tools to help you fully understand the property you’re looking at, as well as your own financial situation. Don’t go into the negotiation alone. Get an expert to help you make the most of this time of opportunity.
The Staff at San Juan Realty, Inc.
Tags: buyer's market, tips for buyers
