Many people would like to take advantage of the historically low real estate prices and rightfully so, we will probably never see prices this low again in our lifetime. Savvy investors already know that down markets present the best opportunities and the greatest ability to make money. Even if you are not an investor the same rules apply when it comes to finding a good deal.
With lower home prices and lower mortgage rates, now is a great time to buy a house. There are millions of homes currently listed for sale, making this a buyer's market and giving buyers a large selection to choose from. With so many houses on the market, it's useful to hire a buyer's agent to help you sort through the many choices. An agent can make sure you are buying the right house for the best possible deal.
Know Your Local Housing Market-
Buyer's should be familiar with areas where they are considering buying a house. Find out what's happening in the local market, especially in the neighborhoods you want to buy in. In some areas, one block may be a buyer's market with many available reduced-price properties, but the next could be competitive, perhaps because the school district is better. Location is an important factor when deciding where to buy, especially if you plan on selling in the future. Researching the real estate market in your areas of interest will help in determining the true price range of a property in the area. This will help you set a realistic offer price and avoid over paying for a property.
Property Values & Equity-
Although there are a lot of great deals on the market right now, the property values for many of these homes have diminished greatly. Buying a home with a higher property value than the purchase price is important for future equity and value. Determining the true value of properties in this market can sometimes be a challenge. Many online valuation tools are incorrect and can easily mislead the average buyer not familiar with all the factors involved when determining the value of a property.
Even property appraisals are only as good as the knowledge of that particular appraiser; therefore knowing how a property is appraised is also important. Due to the current market many neighborhoods have low sales, which will affect the outcome of the property value. For example, if there are too many foreclosures in a neighborhood, the overall property values will be significantly lower. Because of low sales data, many appraisers determine the value of a property based on sales that are not relevant to the actual property. This is a common practice with inexperienced appraisers in this market. We attend property appraisal appointments to ensure properties selected by our buyers are appraised correct.
3 out of 4 people have more equity in their home than assets in retirement plans, stocks, mutual funds, and savings. Buying a home is more than finding a nice place to live. It should be considered as an important investment vehicle to your overall net worth and financial future.
Our extensive background in real estate investments allow us to find our buyers the right home with property values greater than the purchase price.
Buying A Home With Resale Value-
Many home buyers expect to buy a bigger and better home in the future, so resale value should be an important factor in your decision-making. Even if you plan on staying in your home indefinitely, there is no way to predict if you will need to sell your home in the future. Many people end up their selling home due to unforeseen circumstances. Buying a house from an investment view point can be a wise strategy.
Generally speaking you can count on a property appreciating in value over time. Surprisingly, in the last several years, the median price of homes all across America has increased in value approximately 10%+ per year, usually it's not quite that high. While no one can guarantee how much a home will grow in value, there are steps you can take when buying a home that will help maximize the potential future value of the home.
Selecting Homes With Greater Potential Resale Value-
-When searching for a house you should first determine what your price range will be. Then choose a neighborhood where your target price is and select homes in the lower price range in that neighborhood. That way, your home has less vulnerability on the down side and the higher-priced homes will help increase the potential future appreciation value in your home.
-Avoid buying homes on or surrounded by busy streets. Buy a house as close to the center of the neighborhood if possible. Don't buy houses across the street from a park or a school. Try to buy in an area where all the homes are similar to one another. For example: buying a large home next to much smaller homes will affect the value of the larger home, especially if it's in a neighborhood.
-Location is always important when buying a home. A careful choice of location can minimize potential negative factors to future resale value and maximize positive selling points in the future.
-Even if you do not have school-age children and do not intend to have children, you should pay attention to the local school system where the home is located. If you decide to sell the property at a later date, many of your potential buyers will take this in consideration when deciding to buy your home.
These are just a few things to consider when buying a home. A buyer's agent with investment experience can find you a house that will fit your personal needs along with the added benefit of potential future increased resale value and equity.
Buying A Distressed Home-
Foreclosed or bank owned homes currently occupy a record share of the housing market, some selling for less than you would pay for a car. But before you jump at these deals, remember that distressed properties may be more neglected and in disrepair than typical listings. Although some of these homes are in need of repairs, they are the best bargains on the market and account for the majority of all discounted properties listed for sale.
Buying a foreclosed home allows buyers to get bigger and better homes for less money. We recommend buyers to focus on homes needing minor and cosmetic repairs. These types of repairs
(like painting and new carpet), are usually inexpensive and easy to fix plus many mortgage loans will allow a certain amount of the loan to go towards repairs. Buyers willing to buy a bank owned home and perform minor repairs can benefit the most in this market.
Negotiating And Making Offers-
Good deals go fast in any market. We see many great homes (mostly bank owned), go under contract in a matter of days. Being ready to make an offer is important in beating the competition and getting a great deal.
When you're ready to make an offer, you must do more than research online comparable sales. Although this gives you an idea of the recent home sales for similar properties like the one you want to buy, you should not solely rely on just this data. Your agent should get the list prices of similar homes currently for sale and the sales-price-to-list-price (SP/LP) average of just-closed sales. (This type of information takes time to be updated in online databases, an agent can obtain the most current data for you quickly.)
If list prices are trending lower than recent comparables and the SP/LP average is below 100%, you will have a good shot at getting a lower-than-list-price offer accepted. Your agent should be able to help you make market-based calculations and suggest an offer price.
Some would-be buyers make the mistake of offering sellers an insultingly low sum, for an already good deal. This often suggests to sellers that you lack knowledge about the market and the property. Sellers will no longer be interested in negotiating any further with you. More often than not, you will lose out on a good deal that will instead go to a more realistic buyer. Offers should be based on tailored market research.
Today's housing market is littered with the former homes of millions of consumers who borrowed more than they could afford. Before looking at homes, figure out what's realistic for you by first determining how much home you can afford to buy. There are many online mortgage calculators that can give you a general idea of the range you may be able to buy in. However, being pre-approved for a mortgage will ultimately tell you how much you are able to qualify for. Be sure to get preapproved for a mortgage prior to searching for a home. Preapproval means a lender has agreed to lend you a certain amount to buy a property. The loan amount will dictate the type of home you can buy.
Pre-qualification is not the same as a pre-approval. A pre-qualification is just a lender's speculation about what they think you'll be able to borrow. However, a preapproval is not an iron-clad guarantee and comes with conditions. To ensure a loan goes through, you'll need to satisfy the lender, (who's scrutinizing borrowers harder than ever), that you're financially stable and still employed right up to the day you close on your home.
Using A Buyer's Agent-
Talk to a real estate agent and ask for advice. Find out what the market is like in your area of interest. The right real estate agent should be able to give you important market data and help in locating the type of home you are looking for.
Buyers Should Use A Buyer's Agent For Several Key Reasons:
Hiring A Buyer's Agent Is Free-
When a homeowner decides to list their property for sale with a real estate agent, they pay a commission fee to the agent when the property sells. A percentage of the commission paid by the seller will go to the buyer's agent. Therefore it is free for buyers to use an agent to find and buy a home.
Agents who list a property for sale work for the seller, if a buyer does not have their own agent, the listing agent becomes their agent as well. Using your own buyers' agent will ensure that your interest is protected when it comes to things like price negotiations, etc.
In today's market it's important to know the area in which you want to purchase a property. A buyers' agent can make sure that you purchase a property in the right area, at the right price and at the most favorable terms.
The Real Estate Transaction-
Purchasing a home is one of the most important investments one can make, therefore it is very important that a buyer, be exclusively represented in the transaction.
We can help with all your home buying needs. Let us represent you with your home purchase!
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