Buying Homes when the Market is Down buy Demand is UP!
I read that in Southern California home prices were down 30+% in 2008.
I also read that there was a huge increase in the total number of homes sold last year in Southern California.???
That makes for a lot of people trying to buy up all of the great deals. I know of a couple of old military friends from out there who had to make offers on multiple homes just to get into one. They kept getting stuck in multiple offer situations with other buyers wanting the same great deal.
So what do you need to know if you are looking into buying one of these great bargains?
1) If you want the home and there is a lot of demand for it, you may have to write over their asking price. As crazy as it sounds, this is happening quite frequently on homes that have been priced to move.
2) Have your pre-approval ready to go. In the past year I have had 3 people lose out on homes because they didn't want to go to the bank before they started looking at homes. All three of them found the great deal... and lost it because their loan officer wasn't in until Monday. Tough breaks.
3) Be prepared to move. The good homes sell fast. I'm not talking within days, I'm talking hours.
4) If the home you wanted gets sold, write a back-up offer on it. You'd be surprised how many home deals are falling apart these days because of financing reasons. You could get a second shot at the home of your dreams.
5) Hire a buyer's broker to work on your behalf. Make sure that you have someone looking out for your best interests and that can get things done in a timely fashion.
I received a call from a potential home buyer today that was quite enlightening. He wanted to see a home that was back on the market because the buyer couldn't get financing thanks to some of the recent loan changes. Not everyone has an extra 5-10% to put down on a home above what was needed in December. I know this because It was my clients who had the financing fall apart. I told the potential buyer that I needed to check what the current status was on the home. I wanted to check because there were at least 4 interested buyers back in December when my clients wrote their offer. It could have already sold again.
It turns out the home had already been re-sold.
This isn't good news for me as I could use the sale. The potential buyer tells me that he was ready to buy the home back in early January. Unfortunately, they hadn't sought out proper representation at the time and lost out. Now, they have lost out again because they didn't have someone write a back-up offer for them back in early January. My recommendation to them - get proper representation and write a back-up offer now. Who knows, this offer could fall apart too.
Jason Tangen - GRI, e-PRO - Real Estate Broker Associate with Edina Realty in St Cloud.
http://JasonTangen.EdinaRealty.com - Search homes for sale in Sartell, MN and surrounding areas.
http://StCloudEdina.com - Get a free list of the bank owned homes on the St Cloud MLS.
