How To Take Advantage of the Buyer's Market
In areas like Tampa Bay Florida there is no doubt it is currently a buyer's market in real estate. Some buyers are getting great deals but others seem to miss out. Learn what you need to know to take advantage of the current market.
There's no doubt in anyone's mind that we're currently in a buyer's market for real estate. It has been a buyer's market for 3-4 years now and looks like it will continue at least until some time next year.
To take advantage of this there are some things you should be aware of.
First you need to determine if it makes sense for you to purchase at this time.
Buying a home, condo or townhouse because you are moving here or to use for a getaway or vacation home would be a good reason to buy now as long as you can really afford to do so.
Buying something as a long-term investment, if you can afford to do so, could also be the right thing for you to do at this time.
Once you've determined that you do want to buy now, you need to address one of the most important steps in being prepared to take advantage of this buyer's market: getting the financing for your purchase worked out. In my experience, the best deals will require that you have either a preapproval letter for a loan or proof of funds for a cash purchase and in many cases they will be required with any offer you submit.
The most fatal error for buyers in this market is not being prepared well enough to act quickly when they find the right property or a great deal.
To show you how this affects your ability to take advantage of this market, I'll give you some information about a couple of my clients' recent dealings.
One of my clients wanted an exceptional deal for a waterview condo that looked out over Tampa Bay or the Gulf of Mexico. I found the perfect deal for him and emailed him the listing within a few days of the condo coming on the market. He came down the following weekend and was very excited about the condo and asked me to call the seller's realtor the next morning about putting in an offer. When I called I found out that it had just gone under contract and in the 7 days it was on the market had several offers submitted on it.
There really was not much we could have done since my client did have to come down here to see it, but if it hadn't already gone under contract he would still have had 2 barriers that would have likely prevented him from getting this deal. The first was not having his financing fully arranged. The second was not recognizing how good a deal it already was - he wanted to try to get it for much lower than it was listed for.
Then there was my client who had already decided he wanted to buy a vacation home in this area who came up here with his wife to look at some villas and townhouses. From what they were describing, a villa (one-story townhouse) sounded like the best option.
We looked at several but there was one which really caught their attention. It was a villa that was priced well and had 2 features you normally don't see in a villa. It was stand-alone (not attached to any other villa) and it had a large, fenced backyard.
My client went back home saying he wanted a few days to think about it. I warned him not to delay as there had already been an offer that was nearly accepted and the property had been on the market less than a month. The next day the listing agent called to let me know they were expecting an offer that day that would likely be acceptable and I called my client to let him know. He did not want to be rushed.
The next day I found out that the villa was now under contract and my client had missed out on the best deal for what they wanted. I found out that part of the reason for the delay was that he wanted to speak with his financial advisor about how he was going to make the purchase to work out the best tax consequences. His advisor didn't work on weekends so he had to wait until the workweek began, and the fact that he didn't handle this before coming resulted in his losing the property he wanted to buy.
I bring this one up to make it clear why you really need to have your financing worked out fully prior to looking at properties.
It's good to be aware that things like these can happen since there has been an assumption by many buyers that since it is a buyer's market you always have the upper hand and can act more slowly. Actually that is true sometimes BUT not for great properties that are priced well or for ones that are a great deal.
Let me summarize some key points if you want to make the most of the buyer's market:
If you don't recognize an exceptional deal, you will never get one.
If you don't act quickly and give a strong offer when you find an exceptional deal, you will most likely lose it.
If you aren't fully prepared with your financing lined up, including preapproval or proof of funds letters, you won't be able to act quickly enough on an exceptional deal.
There are exceptions to this but in my recent experiences I've found that these hold true more often than not.
One point I want to emphasize which I briefly described in the first example. It also goes along with the second bulleted point above.
When you find an exceptional deal, don't lose it because you think you can get it for a lot less since the sellers "are probably desperate" or "they'll probably take less because of how the real estate market is doing". There are times when you can negotiate a seller or bank down on a property and times when it is already priced so well that it will be snatched up very quickly at the listed price. You either need to know enough to recognize this or listen to your realtor when they tell you this (especially when they provide enough information to show this is the case).
Knowing this information can provide you with a foundation on which you can proceed successfully in your real estate purchase so that you don't let the right time to buy slip away.
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ABOUT THE AUTHOR
Look through the list of some really good deal available at my Deals page on my blog. If you want to see other resources and information on the area you can visit my site at http://www.searchdunedinhomes.com.