Great Time to Buy in A Slow Real Estate Market
Most home buyers in a slow real estate market believe that because the market is slow they are in complete control A couple things about that statement are true because there are quite a few properties on the market in slow timesMost home buyers in a slow real estate market believe that because the market is slow they are in complete control.
A couple things about that statement are true because there are quite a few properties on the market in slow times. Typically there are more properties than there are home buyers. This means it is a rare occurrence for there to be multiple offers on the same property and therefore less competition. Due to the number of homes available exceeding the number of home buyers, sellers will be lowering their asking prices for homes to gain the attention of the available buyers.
A home buyer in a slow market will just not pay more than they need to for a home that is similar to one selling down the street for thousands less. This creates an advantage for home buyers in the marketplace, but there are still some things that home buyers need to be cautious about in a market that strongly favors them.
Just because a particular home has the lowest price does not mean that is the right home to purchase. Home buyers should always take advantage of real estate professionals advice when it comes to property evaluations and make sure to get home inspected for condition by professional home inspectors.
Independent home inspectors will be able to provide home buyers with a overview of the repairs which will be needed in the home to give you an approximate idea of and repair expenses. A quality home inspector should also be able to give you some insight as to any maintenance issues which might come up in the future.
If there is an item which may not be an immediate issue, but will need attention a couple years down the road an inspection should be able to bring this to your attention. A rood that is nearing the end of its lifespan may be all right for now, but in a couple years it will need attention. Knowing about items like this will keep you from overspending on your home.
Renovations can also be costly especially when they are being completed by first time home owners with little experience. There are many things that affect the cost of renovations such as contractor costs, city codes and permits and those unexpected issues that pop up during large renovation projects.
In slow markets a new home owner might want to avoid properties which need major renovations during their home search mainly because it could end up costing them more than the home is worth in the end. It is extremely important to consider any major repair issues and the costs associated with them when you are trying to find the right home.
Even in a buyer?s market there are some risks associated with a home purchase. One of the largest risks is that the home just might continue to decrease in value prior to increasing again.
Another risk is that though the home may not decrease in value, it may not increase either. When the value of a home remains flat is means that the home owner will not gain equity as quickly. There are some cases where a home owner who is not planning on being in a home for several years may want to hold off on purchasing one.
A home buyer also needs to be cautious when financing their home. Though sometimes tempting, buyers should be wary of loans with interest rate adjustments that require refinancing at a later date. The lower payment may not be worth the risk.
Should the market continue to be slow when it comes time to refinance you might not be able to get the appraisal needed for the loan.
Even in slow markets home buyers still need to take all the precautions that this major decision demands.
Bruce Swedal is an award winning Denver Realtor. His Denver Real Estate website features data and lists related to the Denver Real Estate Market. Obtain free Denver Relocation Information. Bruce is a member of the Denver Colorado National Assoc of Realtors, SMDRA, REBAC with numerous designations.