By Ellen James Martin
Universal Press Syndicate
November 22, 2007
It's no secret that home buyers can grab real-estate bargains during an economic down cycle. Even in many prime neighborhoods, homeowners who wouldn't budge on price just a few months ago are now willing to negotiate in earnest, says Mark Nash, a real estate broker and author of "1001 Tips for Buying and Selling a Home."
But Nash says many buyers -- particularly first- timers -- are timid about taking advantage of the situation.
"Too many buyers are sitting on the sidelines, scared to act," he says. "They should be seizing the opportunities open to them."
Those who don't yet own a property -- and therefore don't need to sell before they buy -- are often in an excellent position to strike a bargain, he says.
Nash tells about a couple in their mid-20s -- two newly minted MBAs -- who recently bagged an excellent deal on their first home.
The seller was a professor who had taken a new job. When his place went up for sale, he'd insisted on a price Nash says was 10 percent over market value. But as summer passed into fall, the professor's confidence was shaken. Consequently, Nash says the couple was able to grab the townhouse for at least 5 percent below market value.
"For several weeks, the couple circled around this house," he says. "They truly wanted the place but were scared to make a low offer. But as soon as their offer came in, the professor signed it immediately."
Here are several suggestions for first-time buyers seeking a good value:
- Get all your financing paperwork done in advance. Contrary to the belief now widespread among novice homebuyers, the spigots for most mainstream mortgage financing have not been shut-off due to the subprime lending crisis. As lending specialists stress, those with steady jobs and decent credit histories can still obtain a home loan with relative ease.
Leo Berard, charter president of the National Association of Exclusive Buyer Agents, says people contemplating a home purchase should gain pre-approval before heading out to look at homes. Pre-approval means the lender has verified their credit and income before setting a ceiling on their borrowing capability.
- Consider properties that have lingered too long on the market. "In many cases, you can get an exceptional deal on houses that have been sitting unsold for a few months or longer," Nash says. "The light bulb has finally come on for these owners. Suddenly they realize it's more costly for them to stick to their price than to let their house go at a discount."
Buyers have long been counseled to avoid making ridiculously low offers on real estate, lest they insult the homeowners' pride, causing them to sever all contact. Nash says, would-be purchasers can now be somewhat more daring.
- Consider a property that's on the market due to divorce. Some first-time buyers are reluctant to consider a property that's being sold because of a marital breakup. But Nash says it's very possible to avoid this outcome and still get a good deal.
"For every estranged spouse who wants to sabotage the sale, there's another who wants it done and over with so they can move on with their life," he says.
- Concentrate your bargain hunting on promising segments of the market. Granted, there are some bargains available among the thousands of properties that owners have recently lost to their lenders due to foreclosure. Still, you won't necessarily find an abundance of good deals in the foreclosure category.