REAL ESTATE REALITY
Plunging off the high dive into the market
Creators News Service
With home prices dramatically dropping and a shaky and uncertain economy, potential buyers and sellers face complex decisions.
Luckily, there are savvy and seasoned professionals to offer guidance navigating through the current real estate reality. And don't worry about jumping right in -- it can lead to the best opportunities.
"You cannot be afraid to get into the market," said Realtor Sue Correnti of Gilleran Griffin Realtors in Los Angeles. "There's a lot of inventory out there."
It's also a different market. According to research from the National Association of Realtors (NAR), 45 percent of the transactions in the fourth quarter of 2008 were foreclosures and short sales. "Once again, we see a pattern of strong sales gains, particularly in lower priced homes, in areas with price declines resulting from foreclosures," said Lawrence Yun, chief economist for NAR.
The reduced prices help, but there are other reasons to dive in. "Prices are down and mortgage rates are near 50-year lows," said NAR spokesperson Stephanie Singer. "And right now, first-time buyers can take advantage of a temporary tax credit of up to $8,000 that was included in the recent economic stimulus bill."
There may be risks involved, but the payoff in the long run would be worth it. "Taking your chances now would be a smart bet, a smart move," said Realtor Rick Wallace of Coldwell Banker in Malibu, Calif. "Prices are much lower than they have been. We don't know when the exact 'bottom' will be, but anyone who buys now will be happy someday."
But what if you're trying to sell their property in this declining market? Realtor Elizabeth McIvor, also from Malibu, Calif., recommended listening to all offers -- even if they're not close to the asking price. "Offers open doors," McIvor emphasized. "The seller can counter. That's why God created offers. It's a starting-off point for negotiation."
Working with an experienced Realtor or other real estate professional will help you determine the realistic worth of a home in the current market. Part of their job is to advise the seller what they think the bank appraisers will value the property at in the current market and price accordingly. They will know how much comparable property is worth and also be able to tell you the history of the area and its fluctuating prices.
Motivated sellers pressed to move out quickly should price their homes just below market value. It is a way to get action and save a couple months of mortgage payments.
For struggling property owners who are wondering if they should get out before the market sinks lower or stay put and ride it out, Correnti advised reverse mortgaging for those over the age of 62. It would allow the property owner to convert part of their home's equity into tax-free income without having to sell their home, give up title or incur another "second" monthly mortgage payment.
There are plenty of issues when it comes to getting a loan -- especially for people who may have gone into business for themselves. "In lieu of verifiable income, the bank should look at the client's last six months of bank statements," said Correnti. This would allow more self-employed people with substantial income and assets to qualify for mortgage loans.
Buying or selling a home is an emotional decision, and it's a hard choice no matter what the circumstances are. Just remember that thoughtful deliberation, guided by current and forthcoming economic realities, is required to lead a buyer to the home where their heart is and a seller on to an amenable closing.