A Home for Every Buyer
During the last few years the real estate market has been characterized by a trend sparked by Buyers making multiple offers above the asking price. Maybe you’ve been in the game making offers but haven’t won (yet). Maybe you’re still on the sidelines wondering, “Is this a good time to buy?” Conversely, perhaps you’re wondering if this is a good time to sell your house before buying the next one.
You’re not alone. Many people here in the Bay Area are wrestling with these issues. Many have thrown up their hands in frustration. But good news is on the way! Here are a few tips to maintain your sanity.
“Is this the right time to buy?” All my clients (and my friends) ask me this question. It’s really hard to predict the market. We all wish we had bought that stock last year that is now worth 150% more more today. But, only hindsight is 20-20. Instead of attempting to predict the market I encourage clients to find the answers within themselves by asking them to consider the following questions:
1. Do you feel good about your ability to pay the mortgage?
Are you confident in your job situation? Will you be able to find a new job if necessary? If you are optimistic about your source(s) of income, then this might be a good time to take on a new mortgage.
2. Are you emotionally prepared for the stress of moving?
If you have children, are they going to be able to adjust to a new home, new friends, or new school? Many parents want to move into a good school district before their children start kindergarten.
3. Can you really invest the time to look for the right house to buy?
If you’re working 80 hours a week and your weekends are booked with birthday parties and/or sports for the next three months, you might not have time for a home search.
4. Do you have the financial resources for a down payment right now?
Many people want to use the proceeds obtained from selling their current house for their down payment on a new one. However, the chances of buying a house when your offer is contingent upon the sale of your current home are slim. Instead, consider selling your current house to convert your home equity to cash in hand. You’ll know exactly how much you’ll have to use for the down payment as a result. Most people have a rough idea of what their house is worth. However, you won’t know the exact worth until an actual buyer makes an offer. If you try to buy the next house first, you run the risk of stretching too much on the purchase and overestimating the value of your current house – especially if the market shifts down. Or, you may underestimate the worth of your current house and pass on the perfect new home because you didn’t think you could afford it. If you’re wondering where you’ll live after you’ve sold your house, an experienced real estate agent can set realistic expectations for you in terms of prices for homes in the neighborhoods/school districts you’re targeting.
If you answered “no” to one or more of the questions above, then you might want to reconsider purchasing home for the time being.
Don’t be discouraged or frustrated. Here are a few more tips to help with your decision making:
Remember that real estate is a long-term investment.
Try not to get caught up in getting a “good deal”. It might be okay to stretch a little bit to get the house. Your home will be a place to live for many years. It’s a place to plant roots and build community. That is the intangible value in owning a home in the long run. Also, today’s high priced homes could be tomorrow’s bargains! Everyone feels nervous when making such a big decision. However, most people look back and feel great because the property becomes worth so much more than what they paid for it – in the long run.
Choose your agent carefully. Do you consider your real estate agent as a professional that you hired to represent you?
There are many instances where the buyers win or lose their dream home based upon their agent’s professionalism, experience, and reputation in the local market. With over 18,000 agents in the Valley, you are sure to find someone suitable to your needs. Did you know that 76% of agents close fewer than five transactions per year? If your agent isn’t active, you may be at a disadvantage compared to a buyer that has hired one of the top agents in the neighborhood to represent them. The best agents know how to help their clients win. The neighborhood experts can give you the best insights regarding home values and trends of specific communities, too.
Be patient but be proactive. Nothing worthwhile is easily accomplished so don’t give up.
Stay in the game. Each time you have an opportunity to buy a home, make the best offer you can within your financial comfort zone. It might take a little time to find and win the home you want. But it will be worth the wait when your agent says “Congratulations! You got the house!”