How to buy well in a down market
| Buying a home in a down market is not as easy as it seems,
and buyers should be aware of possible pitfalls.
Thats the cautious word from Berry Everitt, CEO of the Chas Everitt International property group, who says that although housing stock and thus choice - is increasing in many property markets around the country, buyers should still base their purchase decisions on sound reasoning.
Down markets allow more room for price negotiation because there are more homes to choose from and fewer buyers. But it is not enough to just strike a deal at a price lower than the listing price buyers must also look for long-term value.
It is vital, he says, to evaluate the long-term prospects of a chosen area. Factors that deserve scrutiny include population growth, job base expansion and new home construction.
For instance, if the population and job base is growing and new construction of homes lags this trend, it may mean that demand will exceed supply in future a sure sign that values will grow and prices will come under upward pressure.
Buyers should also make sure they have financing in place before making an offer on a property, Everitt says. With tighter credit criteria now in place, it is not a foregone conclusion that a bank or lending institution will grant a bond, even if you are able to negotiate a lower price with the seller.
And, he says, buyers should not be tempted to buy the first property they regard as a bargain. Stick to basics such as having a checklist of the features in a home you really cannot do without. Also, it pays to take a conservative approach it does not make much sense to buy a house that is too big for your needs just because you can afford it.
And finally, dont be blinded by attractive prices. Keep to investment basics and make sure that the property you want to buy offers lasting value. Youll be glad you did when your time comes to sell.
Article by: www.chaseveritt.com