Buying and Selling Home in a Balanced Market

Over the last several years most buyers and sellers have dealt with either a buyer's or seller's market. A buyer's market is what the market is called when there are more sellers than buyers, so the listings take longer to sell and buyers can really shop around until they find exactly what they have been looking for. A seller's market occurs when there are few homes for sale and buyers have a lot of competition for homes. For the first time in a long time, the market is shifting toward a balanced market, where it favors neither buyers nor sellers. When the market is more balanced buyers and sellers need to approach the buying and selling of real estate a bit differently.

<b>Great Tips for Those Buying and Selling in a Balanced Market</b>

Most of the time, those that are selling their home can afford to buy a new home before they sell their old home. In a balanced market this is a very risky move because you may be able to find a home that you like before you are able to sell your home. A balanced market often causes homes to sit on the market for a bit longer, so you should be sure that you can afford to have the home sit on the market for a few months before it sells. When the market is balanced you also cannot count on the selling price of your home, so buying a new home before you sell can leave you in a bad place if you don't have savings to fall back on.

On that note, it's important not to count on a specific selling price in a balanced market. Because homes sometimes take a bit longer to sell, it's important to be open about the selling price of your home if you want it to sell. Buyers are often more picky, so you may have to drop the price of your home if you want it to sell quickly. If you count on the selling price of your first home when you buy your second, you can end up in some serious trouble. For this reason, it is often best to put off buying a new home until you sell your current home.

Another option when you are selling and looking to buy at the same time is make a new buy contingent on the first home selling. This can be a risky move, but if your offer is good many sellers will accept the conditions of your offer. Your Realtor can write up the offer so that you have six months to sell your home before you close on the new home. This will allow you some time to attempt to sell your current home before you officially get in over your head with a new home. Again, it's risky to put this into your offer, but if you are careful it can work for you.

<b>The Bottom Line</b>

The bottom line is that in a balanced market it is risky to buy before you sell. Depending on your specific market it can take months to a year to sell a home, so it's best to wait it out. A good tactic that many people use in a balanced market is to sell your current home first. This will give you plenty of time to decide what sort of home you want, so that you aren't rushing through the home selection process. By the time your home sells you will know exactly what you want and you can go for it. If it happens that your home sells really quickly in the balanced market, that's okay! An interim rental will cost you very little and will allow you to sell and move out of your first home, but continue to keep looking for that perfect home to buy. You will also know exactly how much money you have to put into your new home if you sell first, so you can buy a new home with confidence.

Another option is to sell your home, but allow 30 or even 60 days to close on it so you can take that time to either find a decent rental or find something to buy without rushing. Long closes are often best for all parties, so don't be afraid to ask for a long close to give you and your family time to decide where you are going from here.

Selling first just makes the most sense. Because you don't know how long your home will take to sell in a balanced market and you cannot determine how much it will sell for, it is just the safest route to take. If you are a risk taker, than you don't have to go this route, but most people find that the sell first philosophy works better in the balanced market.

5 Ground Rules for Home Buying Success

There are few purchases in life that carry the financial and psychological weight of buying a home.  Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.

Making the wrong decision in buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment.  It is necessary to learn all you can about the world of home buying and mortgages before setting out to purchase the home of your dreams.

While there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.

When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion.  Buying a home can be an emotional process, nevertheless it is imperative to keep your emotions under control and not let them cloud your judgment.

There are five basic ground rules when it comes to buying a home and shopping smart, and they are:

<b>#1 – Get your financing before you get your home</b>

There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding.  While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.

Getting the financing ahead of time has a number of important advantages, including knowing how much you can buy and gaining more respect from the listing agents.  By knowing how much home you can afford before you shop you will avoid wasting your time looking at unaffordable properties, and the listing agent will be more than willing to show you the homes in your price range.

It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process.  These days, mortgages come in far more choices than the typical 15 or 30 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.

<b>#2 – Look at the community, not just the home</b>

It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle.  It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.

We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case.  Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home.  Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents.

<b>#3 – Be fair with your first offer</b>

Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.

Comparing the sales of comparable homes, what are known as "comps" in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.

<b>#4 – Always get a home inspection</b>

Always investigate the home for any possible defects before making an offer.  Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy.

To find the best home inspector, it is a good idea to seek out word of mouth referrals as many of the best home inspectors rely on word of mouth advertising.

<b>#5 – Do not alienate the sellers of the home</b>

Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller.  It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.

Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.