Many of us have seen how home prices have steadily increased in the past years, providing great profits for homeowners and sellers. The real estate market has been performing well with more new home constructions now underway. In addition, more real estate investors now are investing in secondary markets. Economists also predict that home prices may still increase to another 4% to 5% in 2014.
For home buyers and sellers, here are some helpful tips to consider so you can take advantage of the steadily growing real estate market.
- Prepare and review your financial information–With better home prices, expect tougher competition from other potential homebuyers. Be credit-ready by getting your credit report and repair errors immediately if you find one so you can qualify for a home loan with good rates. Getting pre-approval letters will also prove to the seller that you are financially prepared and ready to close quickly.
- Adjust expectation –Negotiate properly with the seller and avoid making lowball offers. If other buyers enter the negotiation, it will be more difficult for you to attain a better deal. Avoid a bidding war by responding to counter offers. You should also consider other homes in case offers really become high.
- Getting conventional mortgage after foreclosure –If you have a foreclosure before, you can still get a conventional loan. Although some people would wait 7 years before applying, a lot of lenders actually only require 3 years of waiting period especially if the foreclosure was caused by an extenuating circumstance. Some lenders will approve the loan if the borrower is willing to provide a larger down payment or with higher interest rates.
- Ask everything about the home and neighborhood –Some sellers are not obliged to disclose other details about the home, which may be very important for you to know as a buyer. Before signing anything, make sure that you asked important information like if there are commercial zoning nearby, other non-residential buildings being constructed nearby like oil wells, water towers, natural gas, are there loud neighbors, criminal activities in the neighborhood, or known criminals living within the neighborhood.
- Plan ahead – Early planning is important when selling a home. Have your home inspected and do major repairs if necessary. Attend other open houses so you’ll know what to do when you do your own open house.
- Screen your agent –It is crucial to find a good agent that will help you with the process. Look for an agent that have extensive computer skills and use mobile technology since a lot of buyers nowadays search the internet first to look for properties and communicate online.
- Do not jump at the first offer –Do not jump at the first offer even if it seems generous especially if you are getting more offers from other buyers. If you are getting more than your expected selling price, give back in good faith.
- Avoid remodelling – Major renovations are recommended if necessary but avoid remodelling especially major areas since there is less profit in remodelling than just offering a lower price for the out-dated but fully functional areas in the home.
- Real estate is local – Do not base your selling price on nationwide trends and news since real estate is local and every market is different. Even prices in neighboring subdivisions can widely vary.
For homebuyers and sellers, just like in other industries, the real estate market is hard to predict and most real estate cycles are short-lived. Watch out for trends and changes in consumer behavior and preferences so you will know how to react accordingly.