April 28, 2010 at 04:42 PM · Posted under Essam Elsafy
The homebuyer tax credit expires but don’t let it take you out of the real estate market.
The real estate market has been buzzing the past couple months as qualifying first-time and move-up buyers rush to take advantage of the homebuyer tax credit. The tax credit, amazingly low interest rates, and attractive home prices made it a historically magical opportunity to buy a home. If you took the plunge and made a savvy buy…congratulations! You will look back in several years and be proud of your smart decision making.
But what if you didn’t buy a home before the April 30, 2010 accepted offer deadline? Should you stop looking to buy? Heavens no! Of course you no longer qualify for the tax credit, but the decision to buy a home remains one of the smartest financial decisions you can make. The conditions are still heavily in your favor.
Interest rates remain below 5 ½ % for most buyers with good credit, prices are very attractive, and sellers are far more open minded about offers. This remains a classic “buy low” real estate opportunity. My advice to you is:
- So stay in the game
- Work with a knowledgeable Realtor
- Find the right home
…..and position yourself now to capture great appreciation in the future.
Email me for my list of “Best Buys” on the North Shore of Milwaukee.
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March 31, 2010 at 07:49 PM · Posted under Essam Elsafy
As Realtors we often hear sellers say, “I better price higher so I have room to negotiate since I’m going to get “low-balled”. Please resist the temptation to do that. The far better strategy is to price your home compellingly. Notice I did not say competitively. Pricing like your competition (competitively) will yield the same results as your competition (hundreds of days on market, inviting low offers, and depressed sellers). By pricing compellingly out of the box you stand out as the clear choice for buyers, you break away from the pack, you get generate offers (and negotiate firmly), and you move on with life.
Ultimately, you make more money. Because eventually, the bitter reality of the market will cause other home owners to adjust too. They are just too emotionally attached to recognize it now. Rather than doing it early (when they should have), they hope their home is different, and they think “all I need is one good buyer”. Unfortunately, they are not armed with the right information and data to make a good decision. Eventually the market will force them to a price BELOW where they should have started, except it will happen 6 to 12 months later.
So please know as an ethical and skilled Realtor I would never want to give my client’s home away. I am fully committed to marketing a home as aggressively as possible and I always create a well thought-out and comprehensive plan to get it sold.
To a certain extent I feel like your stock broker. Imagine this analogy:
Pretend you are fully invested in the DJIA (Dow Jones Industrial Average) and I call you on January 2nd 2009 when the DJIA is at 9,935 to say you should sell it all at 8,735. Naturally you would think I was a crazy. However as we all found out later, by March 6th 2009 the market dropped to 6,627. While 8,735 seemed painful at the time you would have certainly wished you’d sold at 8,735. The same sort of thing is happening in real estate now but home sellers aren’t seeing it. Everything I’m reading suggests that pricing is going to go lower.
Here’s why:
- In many markets there is over a year’s worth of inventory.
- On April 30th the homebuyers’ income tax credit expires.
- Equally important and very rarely discussed is on March 31st the government stops supporting mortgage backed securities. That will cause interest rates to go up.
- The rate of foreclosures is increasing.
- Delinquencies on mortgages is increasing, suggesting even more foreclosures resulting in even lower home prices.
So imagine a real estate environment after April 30th where you are competing with more foreclosures, no income tax credit, and higher interest rates. Challenging to say the least. This why I want you to do your very best be as compelling as possible as you set the price in order to get yourself out of the market as quickly as possible. While the other guy is waits and sells his home for less than you.
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