When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interest rates remaining at near 45-year historic lows, now might be one of the best times in recent memory to buy. While today’s real estate market does offer advantages to buyers, consumers still need to be savvy in order to get the best deal they can.
Following are some things that every homebuyer should keep in mind:
• Don’t Try to Time the Market: When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental. Once a home is priced to what the current market will bear, buyers will make offers. In a buyer’s market, there are more opportunities for negotiations, but making an offer is an important step. If you find a house you love, put your bid in and negotiate. Don’t let it sit for another buyer to make an offer.
• Take Your Time…To A Degree: The increased supply of homes on the market gives homebuyers a great opportunity to evaluate a variety of properties. However, this does not mean that homebuyers should procrastinate. You may find the change in days on the market from last year is just a few days longer.
• Homes Are Selling: Don’t think you are the only one looking for a new home. Properly priced homes are selling. The National Association of REALTORS predicts there will be more than six million home sales in 2007, expected to be the third-best year in history.
• Watch the Mortgage Rates: While it is true that mortgage rates have indeed risen over the past two years, the increase has not been so dramatic as to significantly impact a monthly mortgage payment. Consider the following example: about two years ago, mortgage rates were at approximately 5.85 percent, which translates into a monthly payment of $1,769.82 on a $300,000 loan. The current mortgage rate of 6.32 converts to a monthly payment of $1,860.32 on the same loan, a difference of $90.50. Be sure to watch the rates and do your math carefully, because changes in mortgage rates are not necessarily cost prohibitive.