September 4th, 2013 2:20 PM by Gregg Mower
The fact the more houses are coming on the market faster than they are selling is a phenomenon that we have not seen in a long time. This is not a bad thing as prices are stabilizing with the decrease in demand and increase in supply of homes to sell. More home buyers will have an opportunity to get their closing costs paid for by the sellers in this market. Although, not great for sellers, in that there will not be multiple offers on homes like there used to be, unless the house is priced correctly for a quick sale. As Agents begin the process of adjusting to the new market conditions, Buyers and sellers of Real Estate also have to also adjust to the changing market conditions.
What does this mean if you are planning on purchasing a home over the next few months? As a home buyer you will find that you are more in control than you were just a few month ago. By in control I mean that you will not have to settle for a house that is not quite what you have been looking for. There will be more choices out there and more motivated sellers. What does a motivated seller mean to you as a home buyer? Well it means that home sellers will be more apt to lower the price or pay buyer’s closing costs. This will allow those folks that don’t have large down payments an opportunity to have the seller pay for closing costs up to 6% of the sales price allowing a home buyer to only have a minimum down payment of 3.5% for an FHA loan.
What does this mean if you are planning on selling your home? It means that it might take a little longer to sell than just a few months ago. If your home is in the affordability range of $100,000-$300,000 you should have no problem selling but you might need to be more patient. If your home is outside the affordability range, over $300,000, you might have to make concessions to potential buyers to get your home sold. As a seller you will have to be more willing to pay closing costs for buyers to entice them to buy your home. Additionally, as a seller you must remember that your home is just that your home and may not appeal to everyone, so you might want to be talking with an Agent that can help you stage your home for sale.
So why has the Real Estate Market changed so rapidly? There are many factors but the single biggest reason is that interest rates have risen from the high 3’s to the high 4’s now and that cuts people’s ability to qualify for a home loan. Interest rates if not kept in check can kill this unstable market as for every 1% rise in interest rates it will cut a buyer’s qualifications, or buying power $60,000-$80,000 for the average income earner.