You’d think with so many homes for sale, there would be no problem finding one to buy. However, plenty of buyers who would like to buy now to take advantage of low interest rates and prices can’t find the right home.
One problem is that the most desirable areas don’t have an oversupply of good homes for sale. Sellers who don’t have a good reason to sell now aren’t, so the supply of good listings is low.
Many listings that are available in these coveted areas either need a lot of work or are overpriced for the market.
Fixer-uppers aren’t popular because they add to the uncertainty of the transaction. Most buyers are already concerned about the market, their jobs and the state of the economy. They shy away from homes that need a lot of work because it raises more questions and uncertainty. How much will it cost? Could it cost more than expected? How long will it take to complete the job?
HOUSE HUNTING TIP: Buyers who have the vision to imagine a home in its fixed-up condition can keep costs down if they live in the home while the work is being done. Expect it to be a stressful experience and plan on the work taking longer than anticipated. Uncontrollable factors, like rain, can hold a project up due to no fault of the contractor.
Most contractors like to work on a time and materials basis, which leaves the ultimate cost unknown. A fixed-price contract may cost more, but if unanticipated work needs to be done, it won’t cost you more. It’s like paying for insurance.
A listing that has been on the market for some time is likely to be overpriced. Try making a low offer. You might be able to negotiate a mutually acceptable price. Before making an offer, ask your agent to find out if the sellers are planning on reducing the price. If so, make your offer quickly. When listings are lowered to the market price, more than one offer can appear.
Have your agent search the multiple listing service to see if there are any listings that might suit your needs that didn’t sell and were withdrawn from the market. If the owners still want to sell and are willing to be flexible on price (the listing probably didn’t sell because it was overpriced), make an offer and see if you can reach an agreement. First, ask to see disclosures and reports to find out if there’s any reason, other than price, why you wouldn’t want to buy the property.
Another approach is to broaden your search. If you’ve been focusing on only one area, you might consider several other neighborhoods that could work for you. This opens you up to more new inventory.
One couple was set on buying in Piedmont, Calif., for the location and schools. There was so much demand in their price range and so few listings that they were priced out of that niche market. They bought a home in neighboring Contra Costa County where they got much more for their money and good schools, although they had to sacrifice on location.
Easing up on your homebuying requirements helps you to buy sooner rather than later. For instance, if you’d like a view but can drop that requirement, you’ll have a much easier time finding a home to buy. All homebuyers need to make compromises. But don’t buy a home that won’t serve your ongoing housing needs. In this market, it makes sense only to buy for the long term.
THE CLOSING: It’s better to rent until the right place comes along than it is to buy a home that you’ll need to sell again soon.