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The real estate market has changed over the past year. We have gone from a seller’s market, where houses would be theoretically auctioned to the highest buyer. Houses would turn over in literally days, and you had to really search to find your dream home; however, this has all changed. This is not the time anymore to let the sellers push you around. The buyer has the full control in the mortgage transaction now.

Buyer’s Market Changes

The first major key difference in a buyer’s market is that you will find tons of listings on realty websites.  This means that you will have tons of locations to choose from and less of a time limit to place an offer.  Also, the longer you wait, the less expensive the house may become.

The biggest mistake a buyer can make, is having the realtor bully the buyer into placing an offer and closing a house quickly out of fear that the house will ‘sell quickly’. This is not the case in a buyer’s market because there will always be something similar and probably better that you will be able to find.

The second difference is when you are selling an existing property to purchase a new property, do not expect your house to sell in the few months to your closing date of your new property. Instead, make sure that you make your purchase subject to the sale of your existing property. If not, then you may not be able to even get financing from your bank on the closing date or worse, be stuck with thousands of dollars of unexpected fees and penalties.

This is a big mistake that a lot of people make. They will find a dream house that they think that they cannot live without. They make an offer and set a closing date; however, when the time comes to sell there house, they cannot find someone to buy there present location causing them to have to support 2 mortgage payments. I have even heard stories of people that had defaulted on both mortgages because they were unable to find a buyer after 6 months of attempting to sell.

The next change is in the realtors. During buyers markets, realtors are not getting the same amount of work that they were getting a year ago. There incomes have dropped dramatically, and they are most likely having trouble making ends meet because they have lived beyond there means for the past several years. Many of them will treat you as if the market is a sellers market still and try to pressure you into signing purchase agreements that are not beneficial to the buyer.

The realtor will say things like it is standard for the finance waiver to be in a few days, you do not need an appraisal, you do not need an inspection, don’t worry about selling your house, etc. This is a pressure tactic that they wll use to make their commission. Don’t fall into the trap of the realtor trying to earn their money, and if they do try to place one of these pressure tactics on you, then it is time to find a new realtor. They are making thousands of dollars off of you, so you might as well have one that will not lie to you.

Buy and Hold

Another key difference in the real estate atmosphere is that the buyer must have a few goals in mind when making the purchase. They must be willing to buy and hold the property for several years until the real estate returns to increasing in value, and the buyer must be able to accept that the property may decrease in value before it increases in value over the next couple of years.

This market is not for a lot of buyers because even though you will get your selection of tons of different properties, you will be purchasing at, most likely, an immediate loss. Your house is likely to decrease in value before it increases, so make sure you are willing to financially accept the downside of the purchase, and you are willing to hold the property long enough to experience the capital gains.

It is important that you understand all the details of the mortgage scene before getting into searching for a property. In these days of real estate, it is extremely important to do a lot of research before getting a realtor or speaking with a mortgage broker. Even though these people are here to help you, they will still suggest purchasing a property, even though it may not be in your best interest to do so. I have seen many people fall prey to this trap set, so make sure you are not one of them.

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