You may be hearing that things are improving in the residential real estate market, and while that is true, not every area is experiencing the euphoria yet. Even where sales are making gains, it often still depends on the ranges of listing prices - bargain foreclosures, mid-range homes, or high-end properties.
My last two columns addressed the approaches that buyers and sellers should take when the transaction involves homes in the first two categories, but luxury listings are a different story. Between the economy and the credit crunch, this top 10% of listings is suffering, largely because lenders aren't committing to financing such large loans.
As high-end prices will probably still drop, buyers who do qualify for financing have more power in negotiating these sales. However, seek loan pre-approval before you make any offers. Jumbo loans require larger downpayments at slightly higher rates, and qualification takes time.
As the seller of a luxury home, you may have to bite the bullet and undercut your competition, if you're truly committed to making a sale. Use your agent's Competitive Market Analysis to make your pricing decision, and if you can, offer to finance the deal yourself.
The painful truth in this high-end market is that recovery will take longer, so you shouldn't hesitate to set a lower price and offer other concessions to make your sale happen.
Showing posts with label buyer. Show all posts
Showing posts with label buyer. Show all posts
4/9/10
Somewhere In Between
My last column discussed how real estate is beginning to recover, although not everywhere yet. Whether you're buying or selling, you need to be aware of local conditions, and adjust your strategy according to the value of your home.
We've already covered a couple tips for the least expensive homes on the market, and now we'll look at the middle tier of properties. While these listings are seeing more activity than luxury homes, demand is still soft compared to the often bargain "distressed" properties on the market.
Buyers are facing some difficulty in trading up, because their equity has taken a hit over the last few years. As a buyer, it’s best to list your current home for sale and get it under contract before making an offer on the home you want. When you’re ready, reason dictates that you're safe offering 10% under the asking price in a still lukewarm market.
As a seller in the mid-price range, you'll need to make your listing stand out from the competition. Forget about incremental price drops and go for a big cut, which will draw the most attention. Or offer incentives like paying closing costs or a decorating allowance.
If the home you're selling or want to buy is in the luxury range, you'll want to read my next column for some tips in that market.
We've already covered a couple tips for the least expensive homes on the market, and now we'll look at the middle tier of properties. While these listings are seeing more activity than luxury homes, demand is still soft compared to the often bargain "distressed" properties on the market.
Buyers are facing some difficulty in trading up, because their equity has taken a hit over the last few years. As a buyer, it’s best to list your current home for sale and get it under contract before making an offer on the home you want. When you’re ready, reason dictates that you're safe offering 10% under the asking price in a still lukewarm market.
As a seller in the mid-price range, you'll need to make your listing stand out from the competition. Forget about incremental price drops and go for a big cut, which will draw the most attention. Or offer incentives like paying closing costs or a decorating allowance.
If the home you're selling or want to buy is in the luxury range, you'll want to read my next column for some tips in that market.
9/14/09
Luck is a Four-Letter Word
A "buyers' market" is just what it implies - a market in which buyers have the advantage and exploit it. It's not a market that rewards foot-dragging, hesitation or indecision.
Unfortunately, all the factors that created the buyers' market we have today have been reported so negatively and rampantly by various media outlets that buyers are themselves too spooked to even enter the fray. Strangely, people were buying like crazy during the previous sellers' market, when the advantage was actually all to the sellers.
That's when buyers didn't fear paying too much, and now that prices are so low and inventories so high, suddenly buyers DO fear paying too much! However, it's impossible to purposefully time the market to buy at the bottom and sell at the top.
Once the market begins to settle and subsequently improve (and it will), the amazing buying opportunities we've been seeing will begin to disappear. With decreased buying activity now, pent up demand for homes will explode when the market recovers, and buyers will once again be competing for the best homes.
Don't rely on luck in the marketplace - rely on planning. Make a careful decision with a predictable outcome. Has the market dropped enough, right now, to make such a purchase? Absolutely! Forget about the top and the bottom and enter your "safe zone" with confidence.
Unfortunately, all the factors that created the buyers' market we have today have been reported so negatively and rampantly by various media outlets that buyers are themselves too spooked to even enter the fray. Strangely, people were buying like crazy during the previous sellers' market, when the advantage was actually all to the sellers.
That's when buyers didn't fear paying too much, and now that prices are so low and inventories so high, suddenly buyers DO fear paying too much! However, it's impossible to purposefully time the market to buy at the bottom and sell at the top.
Once the market begins to settle and subsequently improve (and it will), the amazing buying opportunities we've been seeing will begin to disappear. With decreased buying activity now, pent up demand for homes will explode when the market recovers, and buyers will once again be competing for the best homes.
Don't rely on luck in the marketplace - rely on planning. Make a careful decision with a predictable outcome. Has the market dropped enough, right now, to make such a purchase? Absolutely! Forget about the top and the bottom and enter your "safe zone" with confidence.
Subscribe to:
Posts (Atom)