The first myth I need to dispel is this: the market sucks. False! There is one market that, even amidst dismal news of the national housing market at large, is booming. You got it-- the FIRST TIME HOME BUYER market. If you're looking at a home in the Greater Philadelphia area for under $250k, here are some further myths I'd like to dispel.
1) We can take our time, the market's dead.
Tell this to my buyer who, just this morning, lost a condo in Willistown because we sat down to write the offer at 11 a.m. only to discover the seller accepted an offer at dawn. What could we have done faster? We saw the property for the first time last night at 5 but the third buyer couldn't accompany, so we scheduled a second showing for the next day. Less than 24 hours of consideration and still we didn't move quickly enough. Then take into account a client in Kimberton who on four separate occasions had decided to write an offer...the same 4 days 4 other buyers decided to do the same, most only hours before us. Because of the climate that's been created for sellers, many listing agents seem to be shying away from entering multiple offer scenarios and sellers are taking their first offer, so long as it's marginally sound. Wow. Which brings me to my next myth busta'....
2) We've got 'em by the balls. I want to bid $70k under asking on this $180,000 single family home.
Sellers are very aware that to be positioned to attract the most showings and sell within a decent time frame they need to be priced correctly. I'm finding many properties currently listed in the $250k and below category are priced to move quickly. Much like buyers, sellers want to take advantage of the $8000 FTHO tax credit (settlement must occur prior to December 1) so they are not wasting time with a "high apple pie in the sky" opening price. Where you can probably roll up to a $2.6M estate in Villanova that's been on the market for 456 days and find a lot more room for negotiation, the leveraging position to take a seller over your lap just may not be there in the lower price points.
So can it hurt to lowball? In the case of my above example, had we been able to present our offer, yes, it could have definitely hurt our chances of reaching a deal. Depending on the other contingencies in the agreement, the sellers may not have even LOOKED at our 85%-of-asking-offer for more than a second before tossing it. At the end of the day this is your decision to make, and you need to consult your real estate professional instead of just taking my word for it. There are ways to sex up an offer that may fall short on price, but makes up for it in lack of contingencies. God created contingencies to keep Realtors up at night; I'm convinced he's in cahoots with the good people over there at the Ambien factory. Anyway, some extra flexibility in the inspections, settlement dates, and no home to sell are gonna help balance out a low price. Again, talk to a pro (a.k.a. shoot me an e-mail)....every deal is oh so different.
3. No one is getting approved for mortgages right now./Everyone is getting approved for mortgages right now.
The simple truth is this: if you have good credit and adequate money for a down payment and closing costs, you shalt fear not when applying for a loan. If you have horrendous credit and $2000 to your name (and that's before paying rent and Comcast), it's probably not the time to buy. If you've been self-employed for under 2 years and don't have documentation of income as reported to the IRS, it could be a long shot. If you have that documentation but have been, ahem, less than forthcoming about your income, now's not the time to think your "word" is going to be enough to woo the lender. These days proof of income is the thing to have. Remember, once you're pre-approved, you need to make application. Then you need a mortgage commitment. Then you want to be sure the deal is going to make it to settlement before you've sent out the Open House announcements to all your loved ones-- being sure you're financially prepared for this investment can only benefit you. If today isn't the right day, a mortgage lender, financial advisor, and Realtor can help get you ready for tomorrow.
If you're finding it hard to get above the doom and gloom messages so many people are spewing in your direction, but you're ready to get your house on the market, my number one piece of advice would be to find an agent who has energy, spunk and an optimistic outlook. The value those intangible qualities will bring to your selling process is priceless. Professionalism, knowledge, and integrity are qualities none of us forget to look for, but attitude is just as key and will open (or close) many a door.
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