When you think about real estate and timing, your thoughts may go to the investor who is trying to “time” the market… to figure out when to make a move so that she can buy low and sell high. The timing of events has been on my mind a lot recently. To be specific, there are two aspects of timing related to the real estate business I have been thinking about.
1) In a broad sense, one aspect of timing relates to the investor above. The market right now is in favor of buyers. The fact is, right now is perhaps the best time to buy a home that my generation may ever experience.
A combination of circumstances has created the perfect time to buy. Interest rates are at historical lows with 30-year fixed rates below five percent as of the date of this article. Government incentives such as the $8000 tax credit for first-time home-buyers and the $6500 tax credit for current homeowners create once-in-a-lifetime opportunities. Motivated sellers in every price range allow for incredible choices for buyers. And with the addition of the Palmetto Heroes Program locally, certain buyers can receive down payment assistance (see my recent blog on this program in the Buyers section).
The bottom line… if you have been considering buying a home and you can get a loan that makes sense for you, my advice is you should buy now. For some homeowners, it might even make sense to go ahead and purchase another home and keep and rent their current home if they truly need to move and have had trouble selling. The market and incentives for buyers are simply incredible right now.
2) In a more specific sense, my thoughts and advice on timing relate to the individual home buyers and sellers that are in the market right now. Here are some examples of what I am getting at.
Think about the home seller who could have struck a contract with a buyer a year ago but through the negotiation ended up $2,000 away from the buyer’s price and could not agree. Now, a year later his home is still for sale and he has dropped the price $10,000. It makes me cringe to hear a seller say, “It is early in the sale process, we can wait for the next offer because it will be better.”
Next, think about the buyer who is getting FHA financing and needs closing cost assistance from his seller. If the buyer does not get his contract closed by 3/31/10 the closing cost amount allowed by the FHA to be paid by the seller is cut in half from 6% of the purchase price to 3%. On a $150k home, the buyer just lost $4500 in incentives. There are lots of other specific examples I could cite.
My advice to sellers and buyers who are in the market and may be negotiating on a contract right now is “get the deal done”. Mr. Buyer, you’ll end up with a home you love and a price that you will in a few years look back on as one of the best buys you ever made. Mr. Seller, you’ll be glad to have the sale done so that you can focus on more important things.
