It’s no secret that the real estate market has slowed down in recent years. Houses aren’t selling as quickly as they did in the white-hot market several years ago, which means people who are selling their houses today have to work harder than ever to make a deal.And that’s a great thing for buyers.
Overheated real estate markets, like we saw a few years ago, result in too many people shopping for too few houses. That drives up prices as multiple buyers make bids on homes and sellers hold out for the very top dollar.
In today’s market, though, there are a lot more bargains to be found. Sellers have to price their homes more aggressively, making now the perfect time for smart buyers to get a great deal.
BUY LOW, SELL HIGH
When someone invests in the stock market, they’re advised to “buy low and sell high.” This means to buy stocks when their prices are depressed and sell when their prices have risen, and the same advice could apply to purchasing a house.
To be clear, housing hasn’t been as historically risky as the stock market over the long run, and there are a lot of reasons to buy a house other than to make money when you sell. A home is truly a home, not just a line on your investment sheet.
But if you want to make money on your home over time, it makes sense to buy at a time when the prices have decreased rather than when they’re at their peak.
MORE CHOICES TO PICK FROM
If you tried to buy a home several years ago but struggled to find the perfect place — or couldn’t afford what you really wanted — you might be pleasantly surprised by today’s market.
There are more homes for sale at better prices today, making it the perfect time for picky buyers. If your dream home was just out of your price range a few years ago, for example, you might find it’s become affordable for you today. Neighborhoods that were out of reach could actually be attainable now.
That’s the great thing about shopping in a buyer’s market. Sellers are more willing to negotiate, and buyers have more options to pick from. And in real estate, like so many other things in life, timing is everything.
FIRST-TIME HOMEBUYER TIPS
Before you start the home-buying process — and as you’re going though it — it’s important to do your homework. You need to know a lot of different things, like what types of loans are available, what to look for in potential neighborhoods, and the definition of lots of real estate terms.
The Internet has both solid information and some misleading websites, but a good agent can help you shorten the learning curve.
REAL ESTATE GLOSSARY
HUD-1 STATEMENT — A document that provides an itemized list of all the funds that are paid at closing. It’s a standard form that spells out exactly what you’re paying for at the closing table.
PREPAYMENT — Money paid to reduce the balance on a loan before it’s due. This can save you a lot of money over the long haul, but you need to know whether your loan has a “prepayment penalty.”