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When to Buy a Home
The old adage that “timing is everything” especially applies to buying
a new home. And trying to be at the right house at the right time
and get it for the right price can be tricky. Here are some guidelines
to assist you:
Turn to the real estate section of your Sunday newspaper. Monitor the
market and tract home prices. Expect to spend 90 days watching the real
estate market through advertisements. Question and investigate homes
that are advertised month after month. Hard-to-sell properties could
either be a warning sign or simply overpriced for the value.
When a real estate agent provides you with descriptions of homes currently
on the market from the Multiple Listing Service (MLS), ask for a list of
homes that were on the market within the last six months or year in the
same neighborhood. Compare asking prices to actual sales prices for
the same type homes.
In addition to monitoring housing prices, learn to identify hot, up-and-coming
neighborhoods by tracking selling prices from week to week. If one
neighborhood experiences price booms while other house prices are sluggish,
its clear which community to invest in. If you’re passionate
about an upscale area – and on a budget – prepare to buy a fixer-upper
and invest some money in renovation. Conversely, beware of buying
a beautiful home in a marginal area. You may not get your money back
when you sell.
Keep close watch on the fluctuating mortgage interest rates. Low
interest rates are the most inspiring reason to buy property. Watch
the rate of Untied States Treasury Bills. According to Sonny Block,
well-known talk show hose and real estate author. T-bills are a sure way
of predicting the rise and fall of mortgage rates.
Also watch the national Discount Rate, the rate at which banks can borrow
money from the government. When the Discount Rate drops, banks pay
less for borrowing the money and in turn reduce mortgage rates to the borrower.
Predicting when a market is ripe for home buying is not an exact science
– even for real estate experts. However, by following these simple
tips – and staying on top of real estate trends, sales patterns and interest
fluctuations, you are sure to get the best house for your buck.
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