Saturday, April 4, 2009

Reality of Realty - Spring Fever in Home Sales

First-time buyers looking for deals discover they have to outbid investors for houses.

Reading the national headlines about record drops in home prices and record foreclosures, might lead homebuyers to assume they can get a steal of a deal on buying a home these days.

Adding to this perception are the stories, both in the news and from family & friends, about buyers getting homes for a fraction of what they sold for a few years ago.

Well, four first-time buyers I talked to this week found out that perception is often not reality.

After getting all excited about a house they already perceived as being theirs, reality blind-sided them as they were all outbid and didn’t get their dream deals. One person in fact, lost out on two homes, one of them to a cash buyer with a lower offer.

I’m sure these homebuyers were a bit shocked when their real estate agents told them their offer, not only didn’t get accepted, but that someone else got the house.

An increasing number of real estate agents & real estate investors tell me they’re seeing foreclosures priced aggressively to sell from the first day they’re listed This is dramatically different than last year when they seemed to be generally priced at the high end when initially listed and it took months for price reductions to bring them in line with buyer expectations.

So, what should serious home buyers do?

Don’t assume what you hear in the news is 100% accurate. Most of us have seen the word “assume” broken into three words that describe what happens when we assume too much.

Talk with real estate experts and find out what’s happening now with real estate in the area you’re looking in. Most of what’s in the news is not area specific and is often broad generalizations.

Keep in mind, even the advice of well-intentioned family & friends is often based on hearsay or second-hand stories.
Homebuyers should consider the magnitude of what they’re investing when they buy a home. If you inherited $100,000 and were trying to decide where to invest it, would you follow the advice of family & friends or would it be better to seek out financial experts and follow their advice? The number of broke lottery winners would probably surprise you. Most of them lost their money by following the advice of family and friends.

Buying a home is a significant investment and should be handled accordingly. Seek the advice of real estate and mortgage experts – unless you want to fall victim to the old saying, “a fool and his money are soon parted”.

No comments:

Post a Comment