| Presently we are experiencing what many in both the | | | | closing. Now you may think I just wasted your time |
| media and industry circles term a buyer's market. | | | | and gave you a useless piece of advice, but you |
| Very simply, it is the first lesson from Marketing 101; | | | | would be amazed how many buyers are too timid or |
| when demand is high and supply is low, prices will | | | | afraid to be aggressive with these types of |
| increase, but when demand is low and supply is high, | | | | concessions. If you do not ask, you will never |
| prices decrease. If you want to increase your price, | | | | receive. The worst that can happen is the sellers will |
| you need to either increase demand or reduce | | | | say no. |
| supply. The challenge we face today revolves around | | | | Another way to save money in a buyer's market is |
| the high number of people forced to sell for various | | | | to include a provision in the purchase contract that |
| reasons, and the perceived fall-out from loose lending | | | | requires the seller to pay all or part of the buyer's |
| practices. | | | | closing costs and/or prepaids. This can have a |
| As a potential buyer in this market, you are afforded | | | | tremendous impact on your buying power because |
| a number of advantages over the seller that typically | | | | these costs associated with buying a home are what |
| are unavailable. Before we go any further, I want to | | | | makes the first few years of homeownership |
| address a common mis-conception the buying public | | | | unprofitable. If you save this money, you will more |
| learns from mass-media outlets and certain market | | | | quickly realize the benefits of appreciation and the |
| gurus... A buyer's market does not mean you will | | | | reduction in your debt obligation to the lender. It is |
| receive any concession from a seller at all regarding | | | | very important to coordinate with your lender, your |
| price, and you may still end up paying top retail price | | | | real estate agent, and your financial adviser to |
| for your next home. Nice homes in great locations will | | | | determine exactly what to ask for so you receive |
| always command top prices, and if you think | | | | maximum benefit. It is also critical that the contract |
| otherwise, you may be easily outbid by another, | | | | be written precisely correct to ensure the seller |
| more aggressive buyer. We'll return to price in a | | | | cannot avoid paying certain costs on a technicality. |
| moment. | | | | Let's revisit price and look at why the buyer's market |
| In this buyer's market there are other significant | | | | hype will not affect an educated seller. Most sellers |
| ways in which you can save money and increase | | | | who have elected to list their home with an agent will |
| your purchasing power, and that is the focus of this | | | | have access to very detailed market data. It will be |
| article. First, let's look at some options from a seller's | | | | obvious to even the most novice seller what the |
| perspective. The seller's goal is to make the | | | | market indicates their home is worth. If the sellers |
| maximum amount of money in the shortest time | | | | take the time and make the effort to prep their |
| with the least investment into the property they | | | | home to sell properly, and they heed the market |
| intend to sell. To make any sort of investment in the | | | | data, they will most likely settle in on a price that a |
| property, the seller will need access to capital | | | | competent buyer will fairly pay. This means you will |
| resources to fund the updates or repairs. A seller can | | | | probably not be receiving any break in pricing from |
| avoid spending the cash or tapping a credit line for | | | | this type of seller. |
| this venture and offer you the buyer a credit on | | | | But you are a savvy buyer fully informed on the |
| price or in the form of a decorating allowance if they | | | | market and fearless in your negotiations. You will |
| choose. | | | | realize that the asking price is fair for the market and |
| What typically happens, though, is the seller will not | | | | attempt to save money in the other ways |
| make the repairs or updates and leave it up to the | | | | mentioned above. Sellers are funny... They will settle |
| buyer to either accept the home as-is, or to ask for | | | | in on a price, but will turn right around and give |
| some concessions in the purchase contract. My first | | | | concessions worth thousands of dollars when |
| tip for you in this buyer's market is to therefore ask | | | | confronted with a strong, motivated buyer and a |
| the seller to give you a credit for a decorating | | | | signed purchase contract. |
| allowance, or to make the necessary repairs before | | | | |