PAST THE PEAK
Buyers can pay less today.
By Neil Jenman
Brighter times are here for homebuyers. Now that prices have stopped soaring, the pressure is off and there is more time to make the right decision.
During a frantic property boom, rising prices are only part of the hassle for buyers. More frustrating is that homes sell so quickly. The luxury of being able to think-it-over is all but denied to buyers in the stampede of a boom. Out of sheer frustration, many buy homes they don't like. Their choice is so limited. A less than perfect home, even at a huge price, seems better than waiting as the supply keeps falling and the prices keep rising.
But not so today. In many areas, prices haven't just slowed, they have started to fall. Homes that once may have sold within hours of being placed for sale are now taking weeks to sell. Some homes seem certain to languish unsold for months until owners realise that the boom is over.
Today, buyers are in a much better position. There is a greater supply of homes and there is more time to make the decision. Granted, the most special homes, those that are well-priced and well presented, will almost always sell quickly, but, still, the pressure is less intense for buyers today.
It is time to consider paying less for the right home.
Not only are buyers more likely to find their perfect home today, they are also more likely to buy it for considerably less than a few months ago.
But some homes are more easily bought cheaply than others. Some owners hold out for the top prices, while others are flexible and will consider any offer. How do you know which is which?
One of the best ways to find out how flexible the owners are is to discover how long a home has been for sale. The longer it remains unsold, the better the chance that the owners will consider a lower price.
How do you find out how long a home has been for sale? Easy, just ask the agent. When it comes to negotiating, most agents are hopeless. Not only will they tell you how long a home has been for sale, many will tell you about offers they have received. Some even tell you the reason the owners are selling. It's all information that can help you to buy at a lower price. (Just remember, however, not to choose these same agents when you decide to sell).
If you can't get much information out of the agent, you can check the newspapers to see how often a home has been advertised. You can also see if the owners have been reducing the asking price. The more a home is advertised, the more likely you are to buy it for a lower price.
Sometimes, all you have to do is ask the right question, such as, "With all this advertising, why hasn't someone bought the home?" Oh dear, this makes sellers gulp.
There is a common perception that homes that have been advertised and have not sold must have something wrong with them. But, more likely, there is something wrong with the price – it's too high.
On the Internet it's even easier to spot homes likely to sell for lower prices. Some sites allow you to see how many "visitors" have seen a home. Sometimes, there may have been hundreds of visitors. Don't let that scare you. Most times, the only reason a home does not sell is that the price is too high.
Granted, agents may say that there are less buyers around. Some may even say that there are "no buyers". But if the homes were suddenly offered for half price, most would sell instantly.
So, there is rarely such a thing as "no buyers". If sales are slow, it is more likely that there are no [serious] sellers, because homes which are priced too high have, in effect, priced themselves out of the market. They may as well be 'off-the-market'.
As a serious buyer, you need serious sellers. You don't want sellers who are "testing the market", or the 'I'll-sell-if-I-get-my-price' types, you want sellers who are keen to sell.
Right now, most sellers know that the property market has reached it peak. Some are hanging on by their fingertips. And unless they sell, which is unlikely at peak prices, they will start to slide down the slope. For many, it's going to be a rugged ride down.
Just as there is nothing more frustrating for buyers in a boom to miss out on the right home and then have to pay a higher price for a worse home, the opposite now applies. There is nothing more frustrating for sellers than to reject an offer and then, later, have to accept a lower offer from the dwindling number of buyers no longer prepared to pay yesterday's prices.
It's a different property market now. It's no longer a case of buyers having to find the right home, it's more a case of sellers having to find the right buyers.
If you are one of those right buyers, make the most of it. Look around, find out how long a home has been for sale, determine how keen the sellers are to sell and then make a firm but fair offer.
In many areas, you can buy today for at least five to ten per cent less than you would have paid yesterday. If not, unless it's your perfect home, walk away and keep looking.
As the market cools, there should be plenty of homes to choose from and plenty of time for you to decide.
Good home buying to you.
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