Okay, it’s a buyer’s market, does that mean we should wait to sell?

It is true, we are are now in a buyer’s market. The tide has been shifting for about three years now and buyers will have the upper hand for the foreseeable future. So if you are a first time buyer it is definitely time to jump in. Rates are currently low and you can get a second chance at homes and prices you may have passed on a few years ago. Do not try to wait for a bottom, you will most likely miss it. Remember those who bought in the last downturn in  the 1990’s? They have come out as the biggest winners. Become a homeowner as soon as you can, even if it means scaling back on that dream house. Get in the market, create equity and then trade up to the next home.

So what about selling in this downturn?

But what if you are thinking of selling your home, should you try to wait it out? Maybe, but it depends on your unique situation. If you bought at the top of the market 3-5 years ago and the only way to sell your house is to drop the price below what you owe and write a big check at settlement then you may want to look for other options. The first is to tough it out and stay in the house. It is only in the past ten years or so that homes became so speculative that buyers were buying and reselling in just a few years. The thought that a home is a long term investment seemed to slip away. The current market urges a return to the long term time horizon. But what if financially  the home is just too much for you or you must move for some other reason? Sellers in this scenario can ease the pain perhaps with a refinance to lower the payments. Another possibility is to turn the property into a rental with income to pay the mortgage until prices recover while taking a lesser priced rental or buying a much less expensive home. In this situation it is important to act before your available emergency fund is depleted and your credit rating is destroyed from missing payments.

A buyer’s market can be good for a seller.

What, how can that be? For sellers who are wanting to trade up to that dream house this market can be a great time make the move. If you have equity in your home sufficient to price it correctly it will sell. It may take a bit longer than it would have 5 years ago, but it will sell. Now let’s say that in this buyer friendly market the value of your home is down 20 percent. Keep in mind that so is the price of the more expensive dream house. That means that you are giving up fewer dollars to sell you home than you are saving to buy the more expensive one. To improve the trade-up scenario be prepared to sell your home before going after the dream home so that you can make a non contingent offer on the next home. A non contingent, settle as soon as possible offer puts you in the strongest possible position to get the price you want to pay. It may mean storing all your stuff and living with the inlaws for a while, but it will be worth it.