Parade magazine recently ran a piece on whether it was time to buy or sell a home that I found interesting (especially since I'm thinking of both buying and selling right now). In particular, they listed five tips on getting the best deal in today's housing market:
- Home prices are likely to continue their decline. In most parts of the country, houses are lingering longer on the market.
- Buyers with good credit will have the upper hand. They have a bounty of homes to choose from and ample time to negotiate a better deal.
- Mortgages may be harder to come by. Banks are asking for higher credit scores and bigger down payments—but giving out smaller loans.
- A few areas of the country will see appreciation. Sales are relatively strong in places such as Utah, Texas, Wyoming and the Pacific Northwest.
- Refinancing will elude home owners who need it most. Anyone with a sub-prime mortgage may well be stuck with it.
Here's how each of these impact my wife and me:
1. Good on the buying side but bad on the selling side for us. Then again, if we're moving into a higher-priced home, we should be "saving" more on the purchase than we'll be "losing" on the sale.
2. We have excellent credit -- and no debt. So we're in a pretty good position here. And since there's no rush for us to make a deal of any sort, we're in an especially good situation.
3. We'll probably need a bridge loan at some point and then will end up with a mortgage of 20% of our new house or so. Of course, we'll work to pay that off quickly.
4. We're not in Utah, Texas, Wyoming and the Pacific Northwest. Sales are weak here.
5. Refinancing is not an issue for us.
Overall, the more I read about the housing situation the more it seems like things are really bad. I know how the media tends to over-dramatize many topics, but in the west Michigan area it seems like they're on the money and it's really, really difficult at this point for people that have to see or are locked into unfavorable mortgages.
You have some fantastic articles, I will be back to read more.
Thank you
kcdc627
http://www.cash4blogging.blogspot.com
Posted by: kcdc627 | May 15, 2007 at 01:41 PM
On the contrary, I think the media is actually downplaying how ugly this thing is going to get.
Posted by: Bronco | May 15, 2007 at 05:39 PM
Another thing to consider is, can you easily find someone to sell your house to that can actually qualify. With all of the tightening that's going on now (income verifications, down payments, higher FICO scores) homes are falling out of escrow because buyers that originally qualified a few months ago, don't anymore. I know you have awesome credit, but how hard is it going to be to find a buyer who has great credit as well?
Posted by: cami | May 16, 2007 at 09:59 AM