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Taking Advantage of a Buyer’s Market

A buyer’s market is one in which there are more homes for sale than there are people looking to buy homes. That means that sellers are competing for the attention of potential buyers. It’s easier to get a good deal during a buyer’s market because more sellers are willing to take a lower offer to move the property.

While a buyer’s market is generally a good thing for someone looking to buy a home, it can also present some difficulties. There are more houses to weed through to find what you really want. There are more foreclosures on the market, which can be complex and difficult to purchase. Sellers might be more willing to cut corners or not disclose issues with a house so they can sell it faster. There are things you should keep in mind during a buyer’s market so you can take advantage of the climate without being taken advantage of yourself.

First of all, the best way to take advantage of a buyer’s market is to act. Don’t sit around, waiting for prices to fall even further. The market might suddenly make a turnaround. While you’re waiting for a house’s price to drop further, a more motivated buyer might buy it out from under you. If you find something that fits your needs, jump on it.

Purchase a house that you’ll be comfortable in for several years. If you plan to have more children, keep that in mind when selecting the house size. If the market is down, it might stay down for a while and if you outgrow the house then you will be in the position of trying to unload it in a buyer’s market.

Stick with traditional mortgages in a buyer’s market. There is no telling how long or how far home values will drop, or when interest rates will rise, so don’t be tricked into a gimmicky loan that might leave you with a payment higher than what you can afford.

Be picky but prompt. Decide before you start searching what you’re looking for in a home. Make a list of your priorities and have your agent only show you homes that meet that list. Remember, in a buyer’s market there are more homes than usual for sale, so there’s a bigger likelihood you’ll find what you want. But once you find it, make an offer- if you’ve found a great deal, it’s likely that someone else will find it soon, as well.

A buyer’s market also allows you to negotiate more than you usually would during a hot real estate climate. Don’t randomly lowball the offer, because some sellers won’t counteroffer if they feel insulted. Do your research into the neighborhood’s comps and be able to defend your offer. If they won’t budge on the asking price, see if the sellers will cover closing costs, or throw in appliances or lawn care equipment, make a desired repair, replace the carpet, or some other bonus.

Focus on what’s going on in your area, not just across the nation. What you see on the news about falling home prices might not be the truth of the neighborhood you’re interested in. Some areas across the country are starting to make a recovery as far as home values. Pay attention to whether prices in your area are still going down, or if they have started to rise.