The truth about the housing market
In today’s uncertain market, fear runs rampant
on both the buying and selling sides of the
fence. Many myths need debunking. Here are five
untruths held by buyers, and five held by
sellers. |
Buyer myth No. 1: The longer the house is on the
market, the more you can negotiate.
When buyers ask, “How long has this property
been on the market?”, they think “six months”
means they can negotiate the price down. It more
often means the seller is stubbornly holding on
to their price. |
Buyer myth No. 2: The sellers today are
desperate.
Most aren’t. Always ask why the sellers are
selling. It’s the key to finding how motivated
and anxious they are. “I’m being transferred to
Dallas” is a very different answer than “We’d
like to find something bigger.” The first
homeowner is hot to trot. |
Buyer myth No. 3: You can’t buy a home today
with less than 20 percent down.
FHA loans require only 3.5 percent down, and you
can even ask the seller to pay the closing
costs. |
Buyer myth No. 4: You need good credit to get a
good loan.
Once again, the FHA to the rescue! They’re happy
to lend money to buyers with bad credit. |
Buyer myth No. 5: You shouldn't buy before
prices have bottomed.
You can’t sharp shoot the real estate market.
Once you identify the “bottom,” prices have
already moved up. |
Seller myth No. 1: Now’s the absolute worst time
to sell.
Not necessarily. It depends upon where you live.
Many of the worst hit markets, like Las Vegas,
Phoenix or San Diego, are already beginning to
turn around. And if you’re a homeowner who wants
to trade up, the loss you’ll take on your
current home will be more than offset by the
bargain you’ll get on the next one. |
Seller myth No. 2: Never respond to a low-ball
bid.
All buyers today feel obligated to put in
low-ball offers to see if the seller bites. If
you respond with a reasonable counter offer,
most buyers can be convinced to come up in price
and make the deal. |
Seller myth No. 3: The first offer is never the
best offer.
Most sellers believe that it’s smart to hold out
for something better. But four times out of
five, the first offer is the best you’ll ever
see. |
Seller myth No. 4: 'I can always reduce my price
later.'
Sellers often price their home high for a few
weeks just to test the market. But buyers shop
by price bracket and if your house is in the
wrong one, you’ll just help sell everyone else’s
home while yours sits there overpriced. And
reducing your price later in small increments
puts you in the position of chasing the tide as
it goes out. |
Seller myth No. 5: Before you refinance, shop
around.
You can if you want, but you’ll usually get the
best deal from your current lender. And you’ll
be able to negotiate your closing costs. |
MSNBC.com