Sunday, December 28, 2008
While there is much uncertainly about the real estate market in 2009, I can offer some thoughts for anyone wishing to make a move this year.
While no one knows where the bottom of the market is, prices have fallen in those sales which have taken place recently. Those sellers who did sell, whether a bank or an individual have taken a major discount off their asking price.
Money is cheap and will get cheaper. Banks do have money to lend provided you have verifiable income, good credit and a 25% down payment. Additionally, the government is going to provide more money for purchasers to fund mortgages through various economic stimulus plans.
I was listening to a television show with Barbara Corcoron. She made some important points for buyers and sellers venturing into the real estate market this year. Some of her ideas make a lot of sense and I thought I would pass them on.
For buyers: Be comfortable with what you can afford, not just what the bank tells you is allowable. Your payment should not exceed 30% of your net take home pay but if you feel that is still a stretch, set your sights lower. Also, look at homes priced 20% above what you can afford and compare those homes. You are in a position to get a deal from a seller who has to sell now. However, if you try to sharp shoot the market and get a rock bottom price looking for the bottom, you could miss the perfect home. By purchasing near bottom, you will be Ok if you are looking at this purchase as a longer term investment and a home, not just a quick flip. Also, look for bank owned properties. Banks have no emotional attachment to the property, it simply a case of numbers. Case in point: 184 Lukes Wood Road, listed for sale with me and is bank owned. The bank is offering this exceptional property at an asking price of $3,150,000. You can visit the website at www.newcanaancountryestate.com.
For sellers: First of all, don’t buy before you sell, this seems obvious but people continue to do it. You can also offer below the market financing at a reduced rate. If you offer to finance the buyer’s mortgage under a 5% interest rate, you will triple the amount of traffic of people who will look at the home. Don’t consider major renovations; however do consider remodeling changes such as changing countertops or backsplashes in the kitchen. Market the property online. 2 out of 3 buyers look online for homes. If you list with a broker, make sure the home is on all the major websites. Your front face online should be shiny and bright. The major websites your home should appear should be your local newspaper online, www.realtor.com, www.trulia.com, www.raveis.com etc.
And call me for any questions regarding the local real estate market.