Home Buyers Tip and Suggestions
Sales of single-family homes will rise modestly again in 2016 and median sales prices should be up 3% to 5%, trade groups and researchers say. While rising mortgage rates and a shortage of first-time buyers may temper that outlook some, the coming year should be another seller's market for real estate. Despite an upsurge in construction, home inventories remain low and multiple offers are still common. While a 6-month home supply is considered a balanced housing market, most markets are well below that, some significantly. Moreover, supporting fundamentals are far more solid than about a decade ago in the pre-bust years of 2006-2007.
Read more: http://www.bankrate.com/finance/real-estate/tips/#ixzz4EA7KAqUD
Buyers Tips
1. Don't overreach
A bidding war might spur you to overspend, but paying an inflated price can make it tough to resell when prices stabilize or sink. (Read 2008-2009 real estate columns as a reminder.) A decision to pay a premium isn't always an errant one, though, when you plan to live in the house long term. Rather than focus on overheated developments, look at comparable homes in neighboring areas with the same access to the schools and amenities that you value. Set a bid ceiling, and try to have a few other deals in the works so you're less inclined to overbid.
2. Be ready, be early, be flexible
Are the best houses still getting snapped up quickly? Then don't wait until you find a home to go loan shopping. Keep your preapproval letter, as opposed to a basic prequalification letter, in tow. Winnow your neighborhood choices before you shop. Line up an action-ready inspector for an immediate property visit.
Have your agent ask what the sellers would value most in the sale. If you can accommodate a fast settlement or short-term, rent-back condition or fewer contingencies and conditions, that can make you stand out when that dream home is hanging in the balance.
3. Buying New?
Get what you pay for. Builders are cranking production to pre-recession levels. But some are cutting corners by hiring untrained help, not waiting for concrete to cure, painting walls without primers or quietly substituting cheaper materials such as a lower grade of countertop granite, or installing inadequate plumbing or HVAC units.
Consider hiring an independent inspector to oversee construction (at $400-plus). Builders may tell you not to worry because they'll hire one. Ahem!
And, be sure the builder is established and that you research online reviews, complaint pages and consumer ratings. Ask specific questions about the crew's experience and certifications.
4. Beware hidden costs
When is a $250,000 house not a $250,000 house?
Answer: Always! Consider these and myriad other closing costs when buying:
5. Seek out an up-and-coming neighborhood
Things to look for include proximity to a new or resurgent business center, the addition of a major employer, a light-rail station, a city cleanup initiative, young people moving there, crime watch and other neighborhood groups being formed, multiple renovations underway and other up-and-coming neighborhoods abutting it.
6. Don't play the bubble game
Thousands of would-be sellers and buyers are agonizing over how they can time their next sale or purchase to coincide with the "pop" of this housing bubble, either by selling soon for optimal profit or swooping in with cash to pounce on post-pop pricing. True, the bust of 2007-2008 was a loud and robust one, but don't look for anything catastrophic this time. The present froth is being fueled by narrow supply and widespread demand, not easy credit and "liars' loans."
Most real estate cycles don't explode like the last one; they just deflate slowly. Real estate continues to be a reliable long-term investment prone to usually modest peaks and valleys, done on a deal-by-deal basis and subject to local economies.
Source: http://www.bankrate.com/finance/real-estate/tips/#ixzz4EA92kU1R
Read more: http://www.bankrate.com/finance/real-estate/tips/#ixzz4EA7KAqUD
Buyers Tips
1. Don't overreach
A bidding war might spur you to overspend, but paying an inflated price can make it tough to resell when prices stabilize or sink. (Read 2008-2009 real estate columns as a reminder.) A decision to pay a premium isn't always an errant one, though, when you plan to live in the house long term. Rather than focus on overheated developments, look at comparable homes in neighboring areas with the same access to the schools and amenities that you value. Set a bid ceiling, and try to have a few other deals in the works so you're less inclined to overbid.
2. Be ready, be early, be flexible
Are the best houses still getting snapped up quickly? Then don't wait until you find a home to go loan shopping. Keep your preapproval letter, as opposed to a basic prequalification letter, in tow. Winnow your neighborhood choices before you shop. Line up an action-ready inspector for an immediate property visit.
Have your agent ask what the sellers would value most in the sale. If you can accommodate a fast settlement or short-term, rent-back condition or fewer contingencies and conditions, that can make you stand out when that dream home is hanging in the balance.
3. Buying New?
Get what you pay for. Builders are cranking production to pre-recession levels. But some are cutting corners by hiring untrained help, not waiting for concrete to cure, painting walls without primers or quietly substituting cheaper materials such as a lower grade of countertop granite, or installing inadequate plumbing or HVAC units.
Consider hiring an independent inspector to oversee construction (at $400-plus). Builders may tell you not to worry because they'll hire one. Ahem!
And, be sure the builder is established and that you research online reviews, complaint pages and consumer ratings. Ask specific questions about the crew's experience and certifications.
4. Beware hidden costs
When is a $250,000 house not a $250,000 house?
Answer: Always! Consider these and myriad other closing costs when buying:
- Origination fee: On a $200,000 mortgage for a $250,000 home, assuming 3.5% interest and no points, you'd pay the lender about $1,800.
- Home inspection: Even if the mortgage insurer doesn't require one, get one for peace of mind.
- Property taxes: You'll usually pay a few months upfront.
- Appraisal: The bank will need to determine how much the place is really worth.
- Private mortgage insurance, or PMI: This depends on your down payment and credit rating.
5. Seek out an up-and-coming neighborhood
Things to look for include proximity to a new or resurgent business center, the addition of a major employer, a light-rail station, a city cleanup initiative, young people moving there, crime watch and other neighborhood groups being formed, multiple renovations underway and other up-and-coming neighborhoods abutting it.
6. Don't play the bubble game
Thousands of would-be sellers and buyers are agonizing over how they can time their next sale or purchase to coincide with the "pop" of this housing bubble, either by selling soon for optimal profit or swooping in with cash to pounce on post-pop pricing. True, the bust of 2007-2008 was a loud and robust one, but don't look for anything catastrophic this time. The present froth is being fueled by narrow supply and widespread demand, not easy credit and "liars' loans."
Most real estate cycles don't explode like the last one; they just deflate slowly. Real estate continues to be a reliable long-term investment prone to usually modest peaks and valleys, done on a deal-by-deal basis and subject to local economies.
Source: http://www.bankrate.com/finance/real-estate/tips/#ixzz4EA92kU1R
