xmlns:og='http://ogp.me/ns#' Wil Coloma: Homebuyers take note - housing prices are on the rise!

Tuesday, April 16, 2013

Homebuyers take note - housing prices are on the rise!

With the housing market changing, take a minute to gain some powerful knowledge before getting into the homebuyer game!

Inventory is tight, and bidding wars are back in some parts of the country.  To snag your dream home, you’ll have to pay up and contend with continuing strict loan requirements.  The bright side: Despite rising prices and mortgage rates that are edging upward, buying a home is still cheaper than renting in the majority of the top 100 markets.

Don’t waste time with a low-ball offer.

Yes, home prices are still way down from their highs, but the days when you could scoop up a house for 20% less than the list price are long gone.  The typical home sells for pretty close to what the owners asked for, and even in shaky markets, sellers have gotten more realistic about pricing.

Be the winner in a bidding war.

You win bidding wars, of course, by raising your price, it also helps to have few contingencies and to move quickly, since today’s sellers don’t want multiple go-arounds.  You have to give your best offer.

Be flexible about closing too:  Quick deals – the median time on the market for homes is 71 days, down from 99 a year ago – have left many sellers scrambling for alternative housing.  Leave the closing date blank on your contract for the seller to fill in, or negotiate a leaseback if the seller needs to stay put for a while.

Outsmart the pros who bring cash.

Lead with your best offer, investors count on nabbing properties at a big discount and are unlikely to boost their bid by more than 5-10%.  Also include a bank prequalification letter or statement of funds to show that your money is as reliable as investors’ cash.

Assess the risk in your local market.

Though prices have revived in most areas of the country, they don’t all have the same staying power.  In markets that bounced back last year merely because prices had fallen so far, you can’t assume a continued streak; once investors clear out, demand will die down.

Play bankers off one another.

Get multiple Good Faith Estimates.  A good Mortgage Loan Broker will be able to do this for you and can explain, line by line, what the pros and cons are for each potential lender.

It’s an exciting time to be a homebuyer, but also a very beneficial time to be a seller.  Demand is high, which is driving prices up.  Be aggressive, and hold the keys to your new home knowing that you’ve been a smart player!

Questions?  Give me a call!

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