For the savvy investor or home buyer, the cautionary phrase of “wait to buy real estate” should give way to “buy real estate then wait.” One of the decisive approaches to savvy real estate investing–whether for personal use or wealth accrual–is timing. In a seller’s market, every buyer who is serious about getting into a home knows that it is time for bidding up. Getting the best price with the best terms is not a winnable strategy for so many buyers. The name of the game is “winning the house.”
Now that price escalations have simmered to a normal pace–the buyers have stopped the bidding frenzy–it is exactly an opportune time when the smart buyer should enter the field. In a buyer’s market, buyers must understand that those who negotiate win, and win big. If you have a house on the Miami real estate market for $420,000 and you want to get it for $399,000 the only thing stopping you is your personal will. If you think you want it for that amount, then write up an offer for that amount and let the negotiation begin. In addition, while you are offering less money, toss in a home, or radon, or roof inspection, $5,000 in closing costs as well as the hot tub in the backyard.
Meanwhile, on the other side of the fence, sellers must learn a lesson early in a normalizing market–it is time to price ahead of the market. That means, a seller must get ahead of the price reduction curve. Pricing ahead of the market, makes many sellers cringe, thinking they are “losing” money on their house. This attitude makes me shake my head in wonderment when I think about it. Looking over average sales prices as if it were a stock quote, homeowners will talk about how they have “lost” money on their home.
Thus striking a good deal is relative–it is all a matter of perspective. If you have gained $190,000 and you want to move up (or down) the level market, it is time to get off the fence and make the good financial decision. Though your house price may have dropped, so has the house price of the move up property.
Sellers should also heed a bit of advice that all agents know and understand. The first offer is usually the best offer. As a seller, if the price really looks low, flow with it. Make a counteroffer. Make the terms and price work. Obviously, beware of bottom feeders–those who are looking for desperate sellers; however, a price fluctuation of 5 percent is not that bad.
The problem for home sellers is the psychological challenge they face, realizing that 5 percent may represent $20,000 dollars. However, if you are moving up keep in mind the $20,000 “loss” on your sale, may be leveled out by the $20,000 “gain” on the move up property.
Everybody is looking for a good deal in the Miami real estate market. Sellers want the highest price possible whereas buyers want to buy a home below asking price. They both want the same thing–a good deal. Following years of a seller’s market, many consumers are facing a more normalized Miami real estate market, which has created a “wait and see” attitude on purchasing or selling Miami real estate.