Tips for Buying Homes and Real Estate Properties in South Tampa
7 Tips for Buying A Home In A Down Market
Prospective buyers have an edge in a down market, but this doesn't mean they are guaranteed to make money on the properties they buy. When real estate sales are slow and there is a glut of homes for sale, buyers have an opportunity to pick up a house on the cheap. The operative word here is "opportunity". There are times when you should pounce and times when you should show restraint and avoid an impulse buy. Knowing the difference could save you thousands of dollars.
1: Do Your Homework
Buyers generally have the advantage in a down market, but this doesn't mean you should walk into a transaction blindly. Prospective buyers should search the internet for listings, inquire with a Realtor or real estate agent and check the local newspapers to gain insight on a particular area. Many national and local real estate agents make their listings available on the internet. The objective of this research is to get to know the price range for the area. You want to get a sense of what a low price would be for your desired area.
2: Get Your Ducks in a Row
To
make sure that you're able to pounce on a deal at a moment's
notice, it makes sense to get pre-approved
for a mortgage and to have an attorney on retainer to handle the
closing paperwork. (To learn more, see Pre-Qualified
Vs. Pre-Approved - What's The Difference? and
The Benefits Of Using A Real
Estate Attorney.)
It
also makes sense to line up a home inspector and an insurance
agent. These professionals can provide valuable information to
the buyer about what parts of the home might need repairs and what it
will cost to insure.
3: Watch For Motivated Sellers
Motivated sellers provide additional bargaining power for potential buyers. If the home has been on the market for several months, has undergone several price reductions, and/or is vacant, this suggests the seller is looking to sell as soon as possible. In situations like this, it makes sense to ask whether the seller will throw in any furniture or fixtures that you like. You can also ask the seller to cover closing costs, whether in full or in part. Of course, the listing price is always negotiable as well.
4: Negotiate With the Realtor
When
houses are selling at a slow pace, many Realtors
are also struggling. In such an environment, both agents and
firms may be more inclined to knock a percentage point or two off of
their commission schedules to get a deal done.
Because it
is the seller's job to pay the Realtor, you may wonder why you should
care about commission. The bottom line is that the commission is
still part of the price. Ask your real estate agent to inquire about
reducing it; this could mean not only a better deal for you, but
it may also facilitate the deal from the seller's perspective.
5: Make Sure You Have Clear Title
During
trying economic times, sellers may be looking to
unload their homes because they are in over their heads. In some
cases, the property may be encumbered by a lien
from a contractor, service provider, bank or other lending
institution. For this reason, it always makes sense to use a title
insurance company and have a
lawyer perform a title search
to make sure that there are no liens and the property can be
transferred. The last thing you want is to have to absorb any of
those liabilities.
Although lenders
typically require title insurance and a title search if a
mortgage is going to be taken out on the home, cash buyers should use
these services as well.
6: Avoid a Bidding War
When
you are shopping in a down market the last thing you want to do is
let your emotions get the best of you. A bidding war is almost
always an unnecessary waste of time and, in the end, a waste of
money. Down markets are all about getting a really good deal, so
to fritter away that possibility on an ego-driven desire to
win is foolish.
The best advice for avoiding a bidding
war is to set a price limit and stick to it. Remember, there are
plenty of homes out there and other deals to be had.
7: Don't Be Afraid To Walk Away
Real estate prices usually drop
as inventory
increases. In a down market, there are always many choices available.
If you are not getting the deal you and your Realtor feel you
deserve, do not be afraid to walk away, and look at the next home on
your list. Remember that in a down market, it is you - the buyer -
that has the power. Some sellers refuse to understand that the market
is down, and will not accept any offers less than what they feel
their home is worth.
Stick to the price you had initially
decided the home was worth; if you cannot make the deal, try again
next time.
To learn more, check out Smart Real Estate Transactions.
Visit South Tampa Luxury Homes
777 South Harbour Island Boulevard Suite
825
Tampa,
Florida 33602
813-676-0490
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