1.) Â Selection, selection, selection. Regardless of the price range a buyer desires, there are plenty of homes from which to choose. Just a few years ago the resale inventory dropped so low that a buyer was forced to make compromises if they were going to locate to the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
2.) No Bidding Wars. In 2005, we had one client that made an offer on ten homes. They lost the first nine to the ‘feeding frenzy’ that existed because other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer’s market.
3.) You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sales price list vs. price ratio is about 90%. A seller will not be insulted if you ‘make them an offer they can’t refuse’.
4.) Patience is tolerated. In the hot seller’s market that existed everything wasÂ rushed. Find a house before other buyers did. Hurry up and make the offer.Â Today a buyer can take their time. Look at several homes and think about yourÂ decision for a few hours.
5.) Due diligence is welcomed. In this market a buyer is encouraged to obtain aÂ home inspection, termite inspection, and appraisal. In 2005, many buyersÂ waived these contingencies in order to save time and not loose the deal.
6.) There are plenty of specs. In the not too distant past, buyers had to ‘play games’ if they wanted a new home. There were lotteries and waitingÂ lists inÂ order to obtain new construction. Some buyers even slept in their cars in order toÂ get to the head of the lines. Today, several home builders have made it clear they are ready to “red tag” the thousands of specs ready for immediate occupancy.
7.) Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past, a seller might insist the home was sold ‘as is’. Many times, there were “back-up” buyers just waiting for the primary buyer to upset the seller whose home was increasing in value almost daily.
8.) Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyers caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. Now, is a great time to buy without having to compete with hundreds of prospective landlords.
9.) Location, location, location. Today’s buyers can find homes closer to work. In the past buyers flocked to suburbs in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
10.) Real Financing is available. The ‘wink, wink’ zero down, “no doc”, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first-time homeowner bond programs, special loans for teachers, and police officers are back in business.
It’s a great time to buy real estate!