"When mortgage payments and property taxes are around the same as it costs to rent, this is usually an indicator that it is an excellent time to buy,” said Dave Sears Co-Founder and Chief Strategist at OptHome. “While the market could still go down a bit, it can also begin to go up, so buyers may want to seriously consider taking the leap."
OptHome cautions savvy buyers and sellers to look at a different kind of "To Dos and To Knows" checklist before making a move this fall or beyond, and offers the following tips.
Tips for Sellers:
- Now is THE time to move up: If you want to buy a bigger or nicer home, now is the time to do it. Right now you will get a better deal because the larger house you want to buy has probably taken more of a price cut than you will have to take on your current home. It’s a sliding scale – in your favor - as you consider more expensive homes.
- Pricing your home correctly has never been more vital; do your homework and listen to your agent: Well priced homes in good condition and good locations are selling faster than ones that are priced above the appropriate range.
- "Fixer-Uppers" don’t win in this market: Homes in good condition are available at very reasonable prices.
- Understanding the Home Improvement Return on Investment Index is critical in this market: Sellers may not recoup investments on many upgrades; focus your dollars and time on what will help your home sell.
- Paint before it gets cold: If you want to sell in the fall, do all your painting now. Use the last of the summer weather to do any exterior painting your home may need.
- Don’t let your house hibernate: Be careful not to give your house the closed-down, winter hibernation look. For example, don’t leave a boat wrapped and covered for winter on your lawn.
Tips for Buyers:
- Don’t try to "time the bottom of the market" – you may kick yourself later: This is a great market for a buyer. By the time you realize the market has hit rock bottom, it will already be on its way back up.
- Do research on prices of similar homes: Focus on the true value of a property rather than the percentage you may be able to negotiate off the price. You may not get the “rock bottom” price, but you will do well as the market improves in 2009 and 2010.
- Really look at ALL the numbers: Find out the price per square foot of your potential new home. Is it below what new construction or the cost to replace it would be? If so, you will build equity quicker.
- Pay close attention to your mortgage rate: Fixed rates are your safest bet and if you can afford it, going with a shorter term mortgage helps build equity in your home faster.
- Be careful with "Short Sales": This is when a seller can’t afford to pay their mortgage and the lender agrees to accept less than what is owed. This should be disclosed, but it is important to ask before you make an offer. Otherwise you may end up at the mercy of the seller’s mortgage holder which could delay and even prevent closing as it can sometimes take weeks for a lender to respond to an offer.
