Discover why buying now benefits you as a buyer

With the current economic crisis and the failure of Washington Mutual, Wachovia, IndyMac and other banks, many people have decided to wait it out rather than to purchase a home now. The media is full of gloom and doom about the housing crisis and much of what they say is statistically accurate. Housing prices are down. Sales are down. The number of foreclosures has skyrocketed.

Additionally, obtaining loans has become more difficult. The death of the subprime mortgage business has certainly resulted in lenders tightening loan requirements. Moreover, many loan products, such as no document and stated income loans, are no longer being offered by a number of lenders. Those that are still offering these types of loan products have implemented very stringent approval requirements. However, this doesn't mean that a buyer cannot obtain a loan. It simply means that a buyer must have good credit, a solid employment history, and the clear ability to repay a loan.

What the media is not telling us is why these very market conditions make now a very good time to buy a home. It precisely because home prices are down and interest rates are low that makes now the best time to buy. Even though there is no guarantee that housing prices will go up within the next few years, if past trends are any indication of what the future will hold for the real estate market, chances are we will be experiencing an upturn in the next three to five years. So, by purchasing a home now, you will be taking a calculated risk that your property's value will have increased by the time you are ready to sell three or more years down the road.

Because of the tremendous increase in the number of foreclosures, buying a home has become much more affordable. Banks are not in the business of owning real estate. For this reason, many banks are willing to accept as much as 15-20% below the list price for properties upon which they have foreclosed and are currently trying to sell. This is significant because a buyer of a foreclosed property will be able to get into the house for less and will have built-in equity. Once the market turns around, the buyer will have even more equity than his counterparts who purchased from an individual seller.

Despite the fact that we are currently in a buyer's market, sellers, including banks, are unwilling to simply give their properties away. For this reason, it's important to have an experienced and knowledgeable realtor advising you and guiding you through the process. Your realtor will help you decide how much to offer and what other terms to include in your offer. Keep in mind that most sellers will reject low ball offers outright. So, be prepared to make a realistic offer and to negotiate in good faith.

For more information go to our buyer website