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Do Home Buyers Need a Reality Check? Late last week I was reading a post from Lisa Zambelli of Cliffco Mortgage Bankers. In her piece she wrote about the pain many potential home buyers are currently experiencing. What I am talking about are the dreaded bidding wars that are occurring here in Long Island and Nassau County. In her article, she provides a few reasons why this is happening.
- Pent-up Buyer Demand: We have lots of buyers emerging from a rough winter here on Long Island, and because they are all hitting the market at once, demand is now soaring.
- Fear of High Mortgages: If you haven't realized it yet, a 1% increase in mortgage rates can mean you paying an extra $500 a month in mortgages, and this can add up to hundreds of thousands of dollars over the lifetime of the loan. Rates are expected to increase by 2015, so now is the time to buy if you wish to do so affordably.
- National Media: Many homeowners are apt to believe media reports that home prices are increasing at high rates. While this is true in some places, the market really is not appreciating as quickly as some would hope. This is causing some people to list their homes far above market value. This causes the properly-priced homes to become even more attractive to buyers, and increases the demand for them.
- Mindset of the Buyer: I believe this is the biggest source of frustration for buyers. Buyers want the perfect house with the lowest interest and the cheapest closing costs. For a few years after the housing bubble, buyers were in the driver's seat and everything was in their favor. However, those times are over and experts have been predicting that interest rates will start to rise this year. Right now, smart sellers are in charge of the market.
- Stop waiting for the perfect home
- Stop thinking you can get over on the seller and get a great deal
- Stop thinking you can get a low interest rate with low closing costs.
Starting today it is all about making wise choices. Create a list of non-negotiable items or features you need in your home. Create a second list with features that would be nice, but aren't necessary. Find a property that you like and quit looking for that once-in-a-lifetime deal, because it is simply not here anymore. The odds of you finding that needle in the haystack with so much competition are nearly zilch.
Instead, find something that you like and be aggressive in your offers. Love the good things about your home, and learn to accept the minor imperfections that come along with it. You may have to do a little work to the home you buy.
These are just a few of the points I wanted to make and I'd also like to thank Lisa for her blog post last week.
As always, if you're searching for real estate in Long Island or Nassau County please feel free to contact us because we would be more than happy to help you. Give us a call or shoot us an email and we would be willing to arrange a time to sit down and discuss your needs.
Thanks for tuning in!
