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What
is a Buyers' Market?
N
o matter what town you are living in or where
you want to move, the home buying and selling
market will be swinging toward one of two
directions. Either it will be in a buyers'
market or a sellers' market, or sometimes, a
little of both.
Most real estate
practitioners consider a typical market to be
one in which homes take an average of six months
to sell. REALTORS® keep track of this number by
keeping up with the days on the market (DOM) of
every home listed and sold. That means that in
the MLS, there are likely to be at least six
months worth of inventory (homes) on hand to
sell for the number of buyers in the market. If
the number rises above six months inventory on
hand, then the market is swinging into a buyer's
market. If it falls below, it is becoming a
seller's market.
A buyer's market
is one in which there are too many homes on the
market for the number of buyers. Homes take
longer to sell and prices fall.
Sometimes buyers
believe that winter time is a buyers' market.
Although it is true that there are fewer buyers,
there are usually a compensating fewer homes on
the market as well. Homes offered for sale
during slower times of the year are generally
aggressively marketed, and may not sell for a
significantly lower price than they would if
they were marketed in
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Can
You Master The Three
C's Of Home Ownership?
T
here are three major benchmarks of a successful
home buying candidate: commitment, credit and
cost. As a preliminary step to the homebuying
plunge, see how you fare in these three
categories:
COMMITMENT:
In order to clear this hurdle, you must be
willing to sacrifice some of those "gypsy
feelings" of freedom moving can afford,
commit to spend time doing house maintenance and
repairs, and be controlled to some degree by the
needs of the home (i.e. lawn watering, snow
removal, etc.) It's very much like nurturing a
child (albeit it one that doesn't talk back nor
require college tuition!)
And there may be
unhappy times. Like when an obnoxious neighbor
makes you wish you could mail the keys to the
landlord and move on---but you can't, you're
committed.
Why should you be
concerned about home ownership commitment?
Because if you live in the home you select for
the average time period of seven years, you will
have spent more than 2,500 days in it! That's a
considerable investment in time, effort, and
money.
CREDIT:
It's never too early to face the fact that most
home buyers have to use credit to swing a
purchase this large. That means that you'll take
on the obligation to check your existing credit
picture, or establish one (if you haven't done
so already), and be willing to manage your
credit once the purchase is complete.
The mortgage
lender will not be as
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Two
Magic Qualifying
Words for Buyers
Are
you a first-time or move-up homebuyer with a champagne
appetite on a chablis income? Do rising interest rates
threaten to hold you back financially from the home you
want to purchase? If so, you need the two magic words
that can make a difference with lenders and cinch the
financing you need -- compensating factors.
What is a compensating
factor? Simply stated, it's a positive used to offset a
negative in mortgage qualifying. For example, let's say
that as a first-time buyer you're a bit short on
qualifying for the $1,250 monthly payment you need. But
since you've made timely rent payments of $1,250 for the
past two years, it signals to the lender that you're
capable of handling that size payment and you get the
loan.
Or perhaps your household
monthly income is shy for the loan you need; but your
spouse is returning to work soon in a job she's been
trained for and can show a previous track record in that
line of work. Again, a compensating factor.
Don't overlook income
increases in your current employment that are guaranteed
to begin within sixty days after loan closing. If
verified by letter from your employer with no other
qualifying
More Articles
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If
you're a potential first-time buyer
wishing you'd taken the home buying
plunge while rates were low, it's not
too late to dive into the market. In
fact, even with interest rates on the
rise, waiting to purchase a home could
end up costing you money.
