Buying Your Next Home
Is It the Right Time for ME to Buy?
Listing (asking) prices are affordable and mortgage rates are at a low but if you are looking to stay in a home less than 5 years, think hard before buying your next home. The recession has hit the entire nation but some areas were hit harder than others. Before buying consider your area. Are property values way down? Are they on the rise?
For example in 2009, the average selling price of a mid-priced ($100,000-$250,000) 3 bedroom, stick built home in zip codes 28405 & 28411 was $175,680. In 2010 the same homes sold for an average of $172,053. Compared to 2007 and 2008 when the averages were $190,845 and $185,460 respectively, it is easy to see that while slowing, home prices are still on a decline.*
Now market aside, if you are planning on buying a home and holding on to it for several years, consider the personal considerations when buying:
Do you plan on staying in the same town/area for an extended period of time or do you like to live somewhere new every few years?
Are you planning on getting married/having kids or are you on the other end and are going to be an empty-nester in the next few years? In other words, will you need to upsize or downsize any time in the near future?
Is your job fairly secure or do you see yourself in a new career and potentially new income level in the next few years?
Are you planning on retiring or sending kids to college in the next few years causing either a dip in income or a rise in expenses?
Do you know what you can afford? Does the bank? Chances are the bank will think you can afford less than you think you can. Getting pre-approved before looking for your next home will save some headaches. Your REALTOR® will be better suited to show you homes in your price range if the bank has determined the maximum amount they are willing to lend you.
Buying a Foreclosure or “Regular” Home
As discussed in our previous blog "Buying Foreclosed Homes" many people have preconceived notions about buying a foreclosed home that is inaccurate. When looking for your next new home, consider all your options, foreclosures and non-foreclosed homes. Also remember, an owner selling their house is more emotional than a bank selling a foreclosure. This can play in your favor as an owner may have more motivation to sell quickly than the bank does.
Negotiating the Contract
Remember this rule about buying real estate above all else- your REALTOR® is a professional real estate agent. He/she studies the market and you are working with them because you trust them to get you the best deal. If you start telling friends, family, etc. details of your offer, they will most likely give you their advice, advice that while filled with good intentions, can cause you to consider withdrawing your offer in hopes of submitting an offer that will get rejected. Listen to your REALTOR®. They are the expert.
Do you need to be present at your home inspection? No. Should you be? Yes. You are paying to make sure you know what is and what potentially could be a problem with your new home. While inspectors will give you a report detailing their findings, being there in person allows for you to see first-hand their findings. It also gives you the chance to ask them their opinions on any maintenance on your new home.
*Data gathered from the Wilmington Regional Association of Realtors