08 Sep Price Reductions in the Real Estate
What does the rash of price reductions mean in the real estate market? There have been a lot of price reductions lately and many across the board in Colorado Springs. In fact, there are more price reductions than a year ago in over 2/3 of the nation’s largest metro areas.
Remember that in the spring and summer we didn’t have enough inventory? Well, some people waited to put their homes on the market hoping that they would get more money.
This doesn’t mean home values are depreciating. There are still over-anxious buyers still making too high offers and bidding wars are still occurring.
However, the appraisals have been coming in low and causes price adjustments on contracts. Many realtors have seen some really big adjustments lately.
A seller can refuse the appraisal price. But if the buyer is getting an FHA and VA loan, they’ll be going for the appraisal price and won’t cover the cost difference.
What can you do if the seller isn’t willing to budge on the price even if the appraisal comes in lower? You can bring money to the table. But you don’t really want to go against what the home is really worth. Why buy a home for more than it’s worth?
However, some people are willing to pay over and above the value of the home. Many are willing to accept it because they are expecting appreciation to double current loan rates over the next 12 months.
If you’re procrastinating buying a home and hoping the interest rates are not going to increase, you might want to rethink that. Home loan rates are not showing signs of decreasing. Calling someone like Ryan Herbig of American Liberty Mortgage and getting locked into an interest rate can help keep that from happening to you.
If buying a home doesn’t seem to be something you can right now, you might want to reconsider. Unless you’re living with your parents, you are paying for somebody else’s mortgage. Usually you end up paying more in rent than for a mortgage. How many times have you been discouraged about the inability to paint a room, build an addition to a property, or even have a pet? Buying a home would be an important step in helping you be able to do these things.
Prices of homes have decreased. However, you probably won’t get a screaming deal…that only happened during the recession. If you are even a little bit interested but aren’t sure about the down payment to buy a home, down payment assistance programs are available for those who qualify.
Another factor to consider about buying a home in the area is the length of time you’re planning to live here. If you’re not going to be here for more than 4-5 years, don’t buy. Typically, if you own a home for less than 5 years, you’ll have to bring money to the table because there isn’t much equity in your home.
At the beginning of spring, there wasn’t enough inventory to meet the need of people wanting to buy homes. Often, there would be more than 16 offers for one listing within 24 hours for a $225,000 house. Many times getting offers at $15-$20,000 more than asking price. The only way to determine which offer to accept came down to the terms of the offers.
Some of the different terms included such information as cash deal. Why would a seller want to choose a cash deal over a loan deal? Because when it comes time to close, cash deals don’t crash and burn for various reasons. Conventional is the second most accepted offers because the buyer has to put a big chunk of change down. Other kinds of offers, such as FHA and VA loans, held other things to think about. FHA is a benefit that allows for people who previously served in the military, and doesn’t require them to have a down payment.
Some people try to save money by doing a For Sale By Owner (FSBO). While FSBOs have decreased to 8%, why would you choose a realtor? Realtors have a larger audience. FSBO’s can’t put their listing in the MLS. 87% of buyers use an agent. The vast majority uses them because they know the market and know how much to list your property. Most people look to online sites first to find out the worth of their homes. However, online sites, such as Trullio and Zillow, do not have accurate information.
Realtors perform a variety of services for their clients. When buying or selling a home, your realtor (or if you’re doing a FSBO, you) will have to be a negotiator and meet and greet all kinds of people, as well as deal with all the paperwork that has to be done for a home sale.
If you would like to pre-qualify, would like to learn more about the down payment assistance programs, are considering a refinance, or you would like to sit down with someone to discuss what is involved in getting a home loan, call Ryan Herbig of American Liberty Mortgage at (719) 228-6055 or on his mobile at (719) 659-0043. Interest rates are only projected to increase. So, now is the time to buy.
Are you interested in finding out about Deborah Elliott-Shultz and MiaBella Properties’ flat listing fee of $3500? Go to cityofcs.com and follow the real estate links to learn about all we do to sell your home. And, have you heard about our buyer’s rebate? That’s right! We give back 1/3 of our commission to help you with your closing costs or to buy new appliances which will be reflected on the settlement statement, and you’ll get it at closing along with a W-9.
If you have any real estate questions, or to find out how MiaBella Properties can help make your real estate experience more affordable, call Deborah Elliott-Shultz at (719) 641-1357.