6 Mistakes Buyers Make In A Seller’s Market

When you’re looking for a home, but the market favors sellers, you need a plan in place to avoid making mistakes.

The real estate market fluctuates often, making it tough to predict whether the market will favor buyers or sellers when it’s your turn to buy. Especially if you’re shopping for real estate in San Francisco, CA, or another market that currently favors sellers, you need to know some tricks of the trade to help ensure you don’t make any mistakes. Buyers in a seller’s market can get what they want, but they need to bring their “A” game — buying a house in a hot market isn’t for the indecisive. Here are six common mistakes many buyers make — mistakes that you can learn to avoid — when shopping in a seller’s market.

1. Not making your best offer
The drive to buy what we want for as little money as possible is practically in our DNA. So when most people see the listing price of a home, they naturally wonder what they can really get the house for. Offering lower than asking price is a perfectly reasonable strategy in some instances, such as if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best idea. “In a seller’s market, many buyers do not step up with a strong enough offer,” says David Dubin, a New York broker. “There is usually a shortage of inventory, and the competition is usually fierce. I always encourage a buyer to come in with a strong opening offer.”

2. Waiting too long to put in an offer
Just as impulse-buying a home is risky, analyzing a home purchase to death in a seller’s market is inadvisable too. When you wait too long, “You are at high risk of losing [the home] you have fallen in love with,” says Dubin. Once you’ve determined the type of home you want, the location you desire, and your price range, and finally find a home that meets your qualifications, make an offer. To give yourself more leverage, be prepared to make a quick offer by having your finances in order — get a preapproval if you can. “Know how much you can truly afford, repair any credit issues, have your down payment in hand, and delay [other] major purchases,” says John Lazenby, president of the Orlando Regional Realtor Association in Florida.

3. Not working with a real estate agent
In a seller’s market, it benefits buyers to get all the help they can. If you have a seasoned agent on your side, you’ll probably have a better chance of getting the home you want. Plus, in most cases, buyers don’t pay real estate agents; sellers do. “When you are competing against other buyers in a fast-paced market, it is vital to be ‘offer-ready,’” says Michael Holt, a New York agent. “Working with a real estate professional saves tons of time and stress, as they know the ins and outs of the process and can provide tremendous insight regarding upcoming inventory.”

4. Not being prequalified (or better yet, preapproved) for a loan
You might know that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio, and your high credit score — but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be prequalified from a lender. “Prequalification is absolutely paramount,” says Teka Klopfenstein, a New York agent. “A buyer has zero advantage if they do not have the cash to purchase without a mortgage and haven’t taken the time to speak with a lender.” Not getting prequalified, she says, “sends a message to the seller that the buyer will lag on getting their ducks in order and aren’t taking their house hunting seriously.”

Preapproval is a step above prequalification (where you simply tell your lender your financial story). The preapproval process involves submitting a mortgage application, complete with supplying verifying documents. “Preapproval from a reputable lender is key,” says New York agent Ryan Stenta. “Presenting this shows the seller that the buyer has already set the wheels in motion and is serious about making [the deal] a reality.”

5. Not being prepared for a bidding war
If there is ever a time when a bidding war could be imminent, it’s during a seller’s market. No buyer wants to be involved in such a battle for fear of possibly going over budget. But broker Michael Holt presents this solution for buyers: “Set your search below your max budget to leave room in case of an over-asking bidding war.”

6. Not learning from your mistakes
There’s no shame in learning that your offer has been declined, but it’s easy to get frustrated if your offers are declined over and over again. Learn from your last transaction(s) so you can get what you want. Stenta says that buying a house, particularly for first-time buyers, is a lot like dating. “You probably have to let a few keepers slip through your fingers, have a couple sleepless nights over it, and then come back with serious intent to lock up the next greatest opportunity in front of you.”

By Laura Agadoni - Trulia.com

First-Time Home Buyers: 4 Sleeper Costs to Watch Out For

Buying your first home is an exciting event, but it also can be an expensive one. Not only is buying a home the biggest financial commitment you are likely to make in your life, it can be even more expensive than you anticipated if you aren’t prepared for all the costs. Here are four sleeper costs first-time home buyers should watch out for.

Mortgage insurance
These days it’s much easier to buy a home without a 20 percent down payment than it used to be, and one of the reasons for that is mortgage insurance. Most home buyers who put down less than 20 percent will have to have the insurance. Your mortgage insurance premium depends on how big your loan is and how little you put down, but you easily could pay several hundred dollars a year in premiums, which usually is added to your monthly mortgage payment.

Homeowners insurance and property taxes
Another cost that first-time home buyers often fail to consider is property taxes and insurance, which can add 2 to 3 percent to their monthly mortgage payment. Most lenders require those amounts to be paid monthly into an escrow account, which the lender then uses to pay the amounts when they are due. A good real estate agent, such as one from EXIT Lakes Realty Premier, will explain to you what amount of mortgage payment to expect, including all extras such as taxes and insurance.

Home-related items
If you are buying a home for the first time and moving there from an apartment, it’s likely that you don’t have many of the tools and furnishings you need for a home. For example, you probably will have to buy a lawnmower, lawn tools, hoses and other outdoors items. You also may need to buy more furnishings to fill out your larger home.

Maintenance
One of the main costs that first-time home buyers fail to account for is ongoing maintenance. When you live in an apartment, most maintenance tasks are taken care of by the landlord, but when you own your own home, they are your responsibility. If you need to call a plumber or electrician, you have to pay for it. If your house needs to be painted or needs a new roof, you will have to shell out the costs.

Buying a home can be a smart financial investment, but to make the most of it, you must factor in all the costs of ownership.

Realty Biz News - Lizzie Weakley, freelance writer - Columbus, Ohio

Orlando Real Estate can post some of 2017's hottest gains

Less than two years after metro Orlando led the nation in foreclosures, it's now expected to post some of the hottest real estate gains in the United States during 2017, two new reports show.

Home values throughout Orange, Seminole, Osceola and Lake counties are expected to increase 5.7 percent during the next year — the highest rate among the country's top 100 metro areas, according to real estate analytics firm Zillow.

"It's actually a thriving market in the sense where people can find employment and buy a house," said Svenja Gudell, chief economist for the company. Wages are still among the nation's lowest, but analysts see that unemployment remains low and wages have begun to improve in recent months.

If predictions hold true, Orlando home-price growth this year would exceed the 4.6 increase in home prices expected nationally. The forecasts factor in projected increases in mortgage interest rates.

Analysts say the price increases are unlikely to lead to a bubble in the near term because mortgages are not easy to get and Orlando home values remain below their peak from a decade ago.

On Thursday, Krystal Little and her husband Jason saw a townhouse hit the market in the Winter Park school district. Within hours, they signed a contract to buy it for cash with intentions to flip it.

"Everything is moving in hours now," said Little, who also is chairwoman of the Orange County chapter of the Central Florida Realty Investors nonprofit.

The Littles plan to paint and make modest improvements to their new townhome before selling it within a few weeks of closing. They plan to reap at least a 15 percent return on their investment.

Even though investor activity won't lead to a long-term housing recovery, that group has helped rehab the region's inventory of foreclosures. Little said they are finding buyers more easily now.

"Two or three years ago, investors had to go all out improving properties," she said. "It had to be pristine. We don't see that now. It's mostly cosmetic improvements."

Limited supply, rising home values, ample jobs and income growth elevated Orlando to the nation's top market position among the 50 largest metro areas for the current quarter, according to real estate analyst Ten-X. Three other Florida metropolitan areas trailed directly behind Orlando in the ranking: Palm Beach, Fort Lauderdale and Tampa — all also among the hardest hit nationally during the recession.

"The top 20 cities in our report include many that were devastated during the foreclosure crisis — especially in states like Florida — and as home prices continue to recover, they still represent buying opportunities for homeowners and investors alike," Ten-X Executive Vice President Rick Sharga said.

Orlando's outlook for the coming year follows two years of booming price increases for a region that suffered during the housing bust. In the core Orlando market of Orange and Seminole counties, median prices have more than doubled from a bottom of $94,900 in January 2011, according to Orlando Regional Realtor Association.

But there is room for more price growth in the Orlando area, in part because home prices are 17 percent below their 2007 peak, said Sharga. Ten-X reported Thursday that Orlando jumped from fourth to first during the last two quarters to overtake Fort Lauderdale as the country's top market, when all factors are considered.

Orlando had the highest expected home appreciation for 2017, Zillow ranked it as the fourth-hottest market overall — as other factors such as unemployment or income growth kept it behind Nashville, Tenn.; Seattle; and Provo, Utah.

Zillow's Gudell said that Orlando still has not recovered fully from the bust. About 11 percent of houses are upside down with values below the mortgage owed on them — four times more than normal for a market but far less than five years ago when about half of mortgages in the region were underwater.

Little said she sees few foreclosure deals and momentum continuing into the new year.

"We've been watching prices steadily increase. Even in the holidays, we were watching it increase," she said. "Normally you see a dip at that time of year, but it's holding steady. That was surprising to me, and it's a sign of a good, strong market."

Copyright © 2017, Orlando Sentinel, By Mary Shanklin - Contact Reporter, Staff Writer