Buyer Concerns Q & A

Q: It seems that home prices appear to be moving down. So why should I buy now? If I wait, won't prices go even lower?

A: All the market fundamentals show that now is a good time to buy - prices are down, interest rates are affordable, there are lots of homes to choose from and you can bargain with sellers.

If you try to wait and time the market until it hits rock bottom, you are likely to lose out. Just as no one can accurately predict the peaks and valleys of the stock market (name one person who sold their tech portfolio in April of 2000), the same holds true for housing. If you sit on the fence and wait for the absolute best deal, you could end up literally waiting for years. And most likely, your guess on market timing would be wrong. But if you choose to buy now, you will not only be in the driver's seat during the buying process, you will also reap the gains of price appreciation once you become a home owner. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.

Q: My neighbor sold his house six months ago for $300,000. Today, I can only get $270,000 for my home. Why should I take a $30,000 loss on my home? Doesn't it make sense to wait out the market until I get the same price on my home that my neighbor got before buying a move-up home?

A: It's always better to trade up in a buyer's market, like the one we are in now. While the value of your house has fallen, the price of higher-end homes has also dropped. Your home value is now down 10 percent to $270,000. But don't forget that in today's buyer's market, higher priced homes are also dropping in price.

But for argument's sake, let's say that a $500,000 move-up home has also dropped 10 percent in value and now sells at $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000.

But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are that same move-up home would also move up in price to at least $500,000. That's a $200,000 price difference between the two homes. So by selling today, you would actually save $20,000. And most likely, by jumping into the market today your savings would be even greater because consumers have much more bargaining power when shopping for higher-end homes in a buyer's market.

...more

Now is the time to "Buy Smart"

A number of factors have converged to make this the best buyers’ market we've seen in years.
✔ Rates are back where they were before the market turned, making mortgage payments affordable.
✔ The wide selection of inventory means buyers have more properties to choose from.
✔ Homeowners in it for the long-term nearly always come out ahead in building wealth.

Courtesy of John L. Scott (current as of January 2008)

“Live in luxury for less..."

Higher quality at a lower price, offered by
well-respected builders, can't help but be
appealing. High-end features like hardwoods,
media centers, and professional landscaping that some buyers could only dream of just a few years ago have become increasingly standard in lower-priced homes.

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Buyer Concerns Q & A

Now is the time to "Buy Smart"

“Live in luxury for less..."

Higher quality at a lower price, offered by well-respected builders, can't help but be appealing. High-end features like hardwoods, media centers, and professional landscaping that some buyers could only dream of just a few years ago have become increasingly standard in lower-priced homes.

Higher quality at a lower price, offered by
well-respected builders, can't help but be
appealing. High-end features like hardwoods,
media centers, and professional landscaping that some buyers could only dream of just a few years ago have become increasingly standard in lower-priced homes.