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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ · Creative mortgages: To entice people to take out mortgages in spite of rising interest rates, some lenders and builders are offering special programs. Many home builders are using "buy-down" programs, in which they buy down a mortgage by two percentage points in year one and one point in year two. This can lead to substantial savings. But watch out for deals that offer flashy savings early on but sucker-punch you later during the loan term. Pre-payment penalties or early termination fees may be in store for those who don't do their homework before signing on the dotted line. · Wheeling and dealing: To gain business, builders (and private sellers) are throwing in specials with the sale of a house. This could mean that they'll give away the keys to a new car or send buyers on a whirlwind vacation. Keep in mind that the cost of these bonuses could comparatively still be lesser than if the seller simply lowered the price of the home by 10 to 15 percent. So don't be too blindsighted by flashy deals. Run the numbers and figure out the best gain. Desperate sellers may even go for a price slash in addition to the gifts if they are asked. · Speak up: When the building inspector is doing his or her run-through on the property, take detailed notes of what is found. The scales are tipped in the buyer's favor to have high-priced improvements made by the seller, for example a new deck or a driveway re-paving. Anxious for business, sellers may also be more likely to take off some money from the bottom line or allow buyers to keep that Viking stove so they don't pass on the house. · Deep cuts: Sellers are some of the last people to realize that they have to reduce the price on their homes if they want to get a sale. It's hard for them to accept that their house is not worth what it may have been last year. There were 4 million homes on the market in the United States in August 2006, a million more than at the same point in 2005. Brokers are realizing creative plans, including pricing homes "right," can be the deciding factor to making a quick sale or having a home join the surplus inventory. Therefore, don't be afraid to make a low-ball offer when bidding on a home. The offer just might be accepted, even in the markets where experts predicted prices would remain relatively stable. But remember, price cuts will often be the last tactic sellers employ to sell their home. · Beware of broker incentives: Builders and private sellers are relying on the expertise of real estate brokers even more during this real estate market. They may offer special incentives, such as bigger commissions or bonuses for those who get the job done. Therefore, a broker may be pulling out all the stops to get buyers to purchase a particular property. Agents are only required to disclose incentive information if they are asked. If an overzealous broker makes you suspicious (a fixer-upper shouldn't be marketed as "move-in ready" or a "showplace"), look for another agent. |