Well we have six months under our belts for 2012. What happened and what is going to happen? Prognostication has always been fun, but after 30 plus years in the Real Estate Sales business, I think I can at least spot some trends that are critical. Recognizing those trends might give you a leg up on the competition for the purchase of your home.
1. Sales are up. It’s good news and bad news. More sales mean more sellers are getting rid of those houses they can’t handle any more. Bad news, the inventory is shrinking. That includes foreclosures and God help us, short sales. I have heard several cases of multiple offers on a single property and buyers being very disappointed.
So the first thing you should do is to get a good real estate agent to work with. Tell he or she that you definitely want to buy and you are motivated to move quickly. Tell them that it is incumbent upon them to keep you informed as far as what is available and be ready to see it fast. Let them know that you will work exclusively with them if they preform. If you are going to shop with other agents, most of them will put you on the back burner and you will not find the deals.
2. Get pre approved for a mortgage ahead of time so that you can move fast when you find the home you want. Your offer will be much stronger if you can indicate that your mortgage approval is conditioned only upon an appraisal for a home.
Mortgage companies and banks in some cases are no longer willing to give you this service because of cost and risk. Have your real estate agent help with his or her contacts. Or start with your own bank and put the squeeze on them.
3. Look at bank owned properties (foreclosures) , than conventional, then short sales. Start with bank owned. No need to go through a lot of paperwork from the seller to the bank to you. By this time, they own it and they want to get rid of it. Your chances of getting a good price here are strong since there is no emotion attached or mortgage to pay off.
Then try conventional. If the owners are not underwater and there is equity and they have to move, the motivation will be strong to keep the selling price at similar levels of foreclosures.
Last, Go ahead and try short sales, but you have to be patient. Make sure your agent is familiar with the process as well as the listing agent. And by the way, do not agree to use a short sale negotiating company that wants to charge you a fee as the buyer. This could literally add thousands of dollars to your closing costs. This should be the responsibility of the seller.
If you are a seller and need to sell because you are underwater, my advice is to contact an attorney who is familiar with negotiating with creditors. In most cases that means finding a good Bankruptcy attorney. You do not have to file bankruptcy to use these attorneys. But they are used to doing deals with creditors and they know the paperwork. You will pay a fee but it might be worth it to renegotiate a first or second mortgage to get the house sold if you have a buyer.
4. Do it soon. Interest rates are not going to stay this low forever. Let me give you an example. A $200,000 mortgage at 3.5 % for 30 years will mean monthly payments of $898. That same mortgage at 5% will cost $1073 a month. And these amounts do not include taxes or insurance.
5. Regardless of the offer, don’t forget to ask the sellers to help you with closing costs. Sellers are motivated to sell. But,…. And this is a big But. Don’t insult the seller with a low ball offer and ask for closing cost help. You will probably put yourself in a lousy negotiating position and also insult the seller. Be reasonable. In any negotiation, both parties have to feel like they won something.
Now get out there and go buy or sell a house.
If you want me to help, then call me at 610-737-2310 or email me at email@example.com
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