Are you debating whether to take advantage of low home prices and big inventory this year? Before you jump into the property market, here are four tips to remember:
1. Be persistent. Though brokers say sellers are less desperate to move property than they were when the bubble burst, there are still distressed sellers out there and deals to be had.
"Because circumstances vary, you need to shop around and be aggressive," says Peter McCuen, head of New York and Miami brokerage Peter McCuen and Associates. "You never know who's in trouble."
2. Know when to buy. Long-term mortgage rates rose to 5.14% last week from 5.12% the week before, according to the National Association of Realtors, but are still lower than the 6.4% rate from this time last year. Existing home sales rose from 4.89 million units in June to 5.24 million units in July, outpacing the 4.99 million homes sold last July. It isn't a home bazaar anymore, and time and stats aren't on your side.
"Right now, they can get 10% to 15% off, but that's not enough for them," says Robert Dullnig, a broker with Kuper Sotheby's (Stock Quote: BID) (BID) - Get Sotheby's Report International Realty Ranch Sales in San Antonio. "Most of them want to wait for a 30% drop, and I don't know if that's going to happen."
(BID) - Get Sotheby's Report3. Prepare to pay. If you're crazy for it and the seller is in no rush to sell, you may just have to inch up to their asking price to get what you want. The median price of existing homes is up to more than $178,000 from $164,000 in January, but is still lower than the $210,000 price tag from this time last year. You're still getting a deal.
(BID) - Get Sotheby's Report "If buyers are looking at prices that are a little bit more than what they thought they'd have to pay because they waited until the market picked up to feel comfortable enough to buy, I tell them that in the end it's going to be a house they live in and enjoy," says Chris Burnside, a Hamptons-based broker for the Christie's subsidiary Brown Harris Stevens. "It will continue to appreciate and, regardless of what they pay, they're getting a discount anyway."
(BID) - Get Sotheby's Report4. Know what you're getting into. Before eyeing a foreclosed estate, an auctioned ranch or a deeply discounted private island on a Web site, bargain hunters should do their homework and investigate the property's background a bit. Even with private islands, it never hurts to ask the neighbors.
(BID) - Get Sotheby's Report "These adventure islands you see on all the Web sites claiming that these are privately owned islands, you see nice photos but never the surrounding areas," says Farhad Vladi, head of German-based private island firm Vladi Private Islands. "You don't see the sand flies. You don't see the difficulty with development. You don't see the social tension of that area. You don't see political stability or the demand for real estate in that specific area."
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