Experts: It’s the Best Time of the Decade to Buy a New Home. Take This Advice.
This winter, buyers have more leverage that any time in recent memory.
“Sellers are more willing to compromise than at any time in the decade,” says Walter Molony, a spokesman for the the National Association of Realtors. “During the housing boom, the seasonal benefit went away because there was a persistence of tight inventory problems, and sellers weren’t motivated to make concessions.”
The opposite now holds true. If you’re looking for a home this holiday season, here is some advice:
- To get a sense of how motivated a seller may be to drop the price, find out how many days the property has been on the market. You’ll need a real estate agent to do this for you.
- If you want a home that’s in foreclosure, don’t bother bargaining with banks over price. A better strategy: Cool your jets and learn how foreclosure sales work. Wait until the place you want is within your reach and hope no one else buys it first.
- The juiciest advantage goes to buyers with a noncontingent offer (i.e. they can buy immediately, without having the purchase contingent on selling an old home), a preapproved mortgage and no need to wait until the school year ends to move.
- Before negotiating on price, calculate the cost of bringing the place up to a livable standard. Pass on places needing major repairs such as a new roof or foundation work, items that may require an additonal home improvement loan on your end.
- Research both your market and the property you are interested in before beginning to negotiate; what works in one area could be poison in another.
“It’s cultural,” says Barbara West, a mortgage broker with Windermere Real Estate/Lane County who loves negotiating. Her advice: Wait to bid on an overpriced property until it’s been on the market awhile because sellers need time to realize that their price is high.
- Insist that your agent deliver your lower offer in person to the sellers, not just to their agent, to explain why you think your offer is justified and how much you appreciate the home. West has noticed that 99% of her in-person offers are accepted, while the success rate drops when the face-to-face component is ignored.
The closer your offer is to the list price, the greater your odds of success. You can even negotiate on the closing date to seal the deal quickly - if your mortgage financing is in place - or to buy yourself more time.