This article provides an example of a buyer trying to leverage of high supply and pricing deals but losing sight of their goals and eventually making a very bad decision. How often have you seen people get caught up in major sales and purchase something they don’t even want because it was such a great deal? This is happening a lot right now and it gets worse if a person waits three years and finds they can’t afford to sell the home at that time. Then they continue to be stuck in a home that they do not like when the could of really enjoyed and been proud of a home they purchased in the first place.
Looking for a diamond in the rough is clever. But make sure to keep your long term goals in mind when seeing all the Temecula and Murrieta home listings and price drops. Don’t be surprised if someone doesn't come down in price. Just make sure your Temecula or Murrieta real estate broker does the necessary property research and helps you to decide a fair or even aggressive price for that perfect house.
Buying a Murrieta, Temecula, or Menfiee home in a buyer’s market can be very challenging for the same reasons people assume it will be simple. Keep in mind that the goal is to get the best home that meets your goals and is the best investment for your family. What are some buyer market benefits?
Big supply of home listings
Ability to negotiate price and terms
Brutal competition between sellers
No matter how you look at it those bullet points are a good for you, right? Believe it or not this can cause hesitation and difficulties for buyers. How so? Let’s say you find the perfect Wildomar home in a superb neighborhood on a beautiful cul-de-sac street and with tones. You love the floorplan but the owners won't move on price and two streets away is the same floor plan, but not as nice of a house in terms of lot or upgrades, and the street isn’t a cul-de-sac. However, the the price is 30k less. And , even better is another model match with no upgrades, stained carpet, and priced a further 15k less.
You would like to get the first home but the other party won’t move on price. Honestly, it looks to be priced fair when considering all pluses. In fact, since it is a down market, it is reduced in price more then it has been in years. But this is a buyer’s market and why should you have to pay 45k more?! With just an additional 10-15k, you think you could rehab the lowest priced house and still have a great house. So, after a lot of consideration you offer on the lower priced model match and plan to fix it up. And, by paying 45k less and spending 10k, you save 35k in theory for the same neighborhood and house just a few streets away, right?
While this seems like a good concept once you're in the house you will have a hard cash expense to make repairs versus having an increased loan payment. So you get a 2nd mortgage or use your nest egg and put 10k into the home and get all new carpet, paint, and some tile in the bathrooms. That’s it and you have now spent all that cash. You also live there for an average of 3-5 years and have “elbow grease” projects every single weekend. While initially fun, they get old fast and you eventually become sick of cars buzzing through the street and constantly wish you had purchased on a cul-de-sac. Due to all this, you don't invite buddies and your family over because you want to get it all “fixed” and so you aren't enjoying the home as much as you thought.
This sounds worst case but I have seen this quite a few times this year already. The sad part is 35k (45K – 10K) more would only cost an average of $210 more a month. And, over 5 years that will equal the 10k you put into the cheaper home and you have had to work every darn weekend, have not enjoyed your house, and never even had a house party!
Also, no matter what you put into the home, you can never create a home with the preferred lot and incredible cul-de-sac location. Those could be your kids playing neighborhood ball safely. So, after 3 years of worrying each time your kids go out to play you decide to sell. However, the market is tough and people are picky, only looking for that perfect, upgraded, cul-de-sac home you passed on! So keep this all in mind and rewind the 3 years of hard work and make sure you keep this mind while you shop today!
Stefan is a professional broker of Temecula Valley Real Estate and an expert of Wildomar, Murrieta and Menifee real estate. Please visit http://www.stefanwest.com for additional articles.
Source: www.articledashboard.com
