This week I wanted to talk a little about how to find a home in today’s market. It is not as easy as some think. The perception is there is a TON of inventory out there and the prices have been dropping for the last few years so I should be able to find the home of my dreams at a huge bargain with no problems – right? WRONG. Let’s take a closer look at why this may not be true.
TONS OF INVENTORY:
Inventory depends on what it is you are looking for. Sure there are currently 1090 single family homes for sale in Iredell County, but you are not looking at all the homes in Iredell County. You are looking for something more specific. Let’s say you want a home from $100,000 to $200,000 – that will narrow it down to 342. You just want to look in Statesville NC – 166. You want .5 acres or more – 90. You have to have a two car garage – 49. You can’t live without 4 bedrooms -10. Get the picture? The inventory gets smaller and smaller when you get down to what you are really looking for in a home. In some price ranges, there is very little inventory to choose from and it does not take long to look at all the homes out there that fit your checklist.
PRICES HAVE BEEN DROPPING AND SHOULD GET A HUGE BARGAIN:
Well, based on what we just went over with the inventory, only 2 of the 10 are distressed homes (20%) and one of them is a 100 year old home priced 60,000 below tax value. Now that could be your bargain – but if you were thinking of something a little newer, you might not get that huge bargain.
I CAN ALWAYS OFFER $30,000 LESS AND SEE IF THEY TAKE IT!
Who cares what the list price says! “I say, let’s throw a really low offer at them and see if they are desperate”. Do you know how many times I hear this and just cringe? Let’s look at this logically. If you are in investor, then you will not be living in the home and your objective is to just get the best price on the property – no personal ties, no “goose bumps” and no attachment. It’s all about price. You don’t care how many times you hear the words “no” from the seller or “forget it and I am not countering either!”. It’s all business. But what about the home buyer that is looking for the home of their dreams? Your objective is to get the best price for the home in this market with the least amount of stress. This is why you have hired your buyers agent! Their job is to pull comparables on the home you are interested in, make sure the price is REASONABLE for the current market and help you get the BEST price you can without overpaying. Going in $30,000 less on a home that is already priced to sell will only get you off on the wrong foot with the sellers. Sure, there is nothing wrong with going in a little under market value to see if the seller has any wiggle room – sometimes you get real lucky and catch a seller at the right time, but mostly they reduce their price very little. If you are not willing to pay what the home is currently worth, you may find yourself with more headaches than you anticipated.
NOW I AM FRUSTRATED WITH HOME SHOPPING.
So many times, I see my buyers getting frustrated with the home shopping process and giving up or getting bummed out because they have seen so many homes and put in offers on several only to hear that they did not get the home. Maybe there were multiple offers and your offer was not the best one, maybe your offer was too low and the seller could not lower their price anymore because they owed too much on the home, maybe the seller just refused to “give their house away” even though it was overpriced to start with, maybe you were booted out because cash offer came in before the seller signed the contract. There are so many scenarios that could happen to derail your search for a home.
HOW CAN I CHANGE THIS SITUATION?
There are several things you can do to take some of the stress away from the home buying process. Consider your needs and wants again and see if you can live without some of your “must haves”. Maybe you could live with a carport instead of garage, maybe you can make 3 bedrooms and a bonus or a basement work instead of 4 bedrooms, maybe .45 acres will be enough if the home is set on the lot well, maybe you can go up in price a little more to give you more options (although I don’t recommend this if you are on a tight budget- stick to the payment you are comfortable with). Ask your buyers agent to suggest alternative things that could still get you a wonderful home, at a great price that will make you happy.
NOT WHAT IT APPEARS
Buying a home is hard. Period. The flood of foreclosures and short sales have not made it any easier for Real Estate Agents, Sellers or for buyers. Sure the rates are real low and there are some great deals out there for buyers, but expect to make some concessions and even some renovations to get the BIG BARGAIN. Set your priorities and make a list of what is REALLY important to you in your next home. Features? Price? Location? If you want it all – be prepared to pay a fair price for it.