What In THe World Is Happening In The Area Real Estate Market Today?

What in the world is happening in the area real estate market today?

If there is one thing that is constant in our lives it is change. Imagine how boring life would be without it. In 2004 & 2005, if you were interested in purchasing a home you had to make your offer before you got back into your car or someone else would buy the home out from under you. In 2006 things changed. In 2007, 2008 and most of 2009 there were not a lot of people thinking about buying a home. Prices were dropping like a rock and no one wanted a depreciating asset.

Today there seem to be three real estate markets. Sales in which the owner/occupant wants to sell their home and move on. However, unless their asking price is competitive with the bank owned homes and short sales they are not even getting lookers, much less offers. There are opportunities for buyers to get good deals by purchasing homes in the category. It all depends on how flexible the seller is. Usually, the longer the home is on the market the more flexible they are.

Short sales are those in which the owner is trying to sell their home for less than they owe their lenders, frequently much less. Once they get an offer, the lender has to approve the sale. That process can easily take six months or longer and chances are the buyer will move on long before the lender even responds with an approval or denial. So sellers and their agents have to sell the home over and over again until it sticks–if the bank does not foreclose in the mean time. The opportunities to get the very best deals are available from this category IF the buyer is willing to wait. Unfortunately, there is no guarantee that the lender is going to approve the short sale, so the wait could be for nothing.

Bank owned homes present their own challenges. Many are in such poor condition that only an experienced contractor can salvage them and make them habitable. A few are move-in ready, and if they are well priced get so many offers that they stop accepting any more. Timing is critical in this category. If you time it right and are lucky you may get a very good deal.

The public is use to the 2007 – 2008 market and are convinced that home prices are still falling and that we are still in a buyer’s market.

Some even think that they can pick up a home for fifty to seventy-five cents on the dollar. Most inexperienced cash buyers are convinced that their cash offer will trump all others. As that old song goes, “It Ain’t Necessarily So.”

Today’s market is one in which only the serious should play. Seller’s want to see proof of funds and prior loan approval before they accept a buyer’s offer. Especially in the lower end of the market, multiple offers are the rule rather than the exception.

In order to get your offer accepted you have to have a substantial down payment that you are willing to deposit into escrow right away. With very few exceptions, the days of 100% financing are gone. You have to have a loan approval letter in hand that clearly states that you are approved for the necessary financing. Sellers want a buyer to have as much skin in the game as possible, so an offer with 20% of the purchase price down will trump an offer with 3.5% down all day long. Demanding that the seller pay for some or all of the closing costs is likely to result in the seller declining your offer in favor of one in which the buyer will pay all their own fees.

The key to success is being 100% ready to make your move, backed up with all of the necessary documentation. Then you have to be fast out of the gate. We had a buyer find a home he liked the day after it came on the market. When we called the listing agent about the home she said that they already had ten offers and was not accepting any more.

Of course, this situation is not the same for every home on the market. It is more prevalent at the lower end of the market. Property condition is also a major factor. Homes that need work don’t move nearly as fast.

Once you have your paperwork ready select a Realtor with whom you feel comfortable. Be prepared to make your search a priority and be willing to reschedule other tasks when a likely home is identified. You will have to move on it FAST!

Then hang on, it could be one hell of a ride!

The best of luck in your search!