Tax Credit for Buyers
The tax credit extension for both first time buyers and trade up buyers is a real boost to the marketplace. Buyers and Sellers should both be well prepared and aware of market conditions before making or negotiating offers. Time is valuable and we want our clients to be very capable of maximizing the benefits that are available to them.
This first quarter of 2010 will be driven by the tax incentives which will create stronger competition for inventory and because of the increased activity below $1,000,000, the median selling price is likely to be lowered. That said, buyers should work with their agent and their loan originator to be completely pre-approved for their mortgage. Pre-approved buyers command more confidence from sellers, especially when there are multiple offers on the table. In this market, many sellers will not consider an offer without a pre-approval from the buyer.
Market Advice for Buyers & Sellers
In most cases an offer is written with standard contingencies including a home inspection and satisfactory appraisal. A seller can have their own inspections done prior to marketing so they have the time to repair or replace items. That will shorten the time from offer to closing or avoid having a buyer get discouraged and walk-away because of what they might perceive as deferred maintenance. A seller can also have an appraiser evaluate their home so they have a good idea of what a bank will approve as a selling price. As a bonus, the seller will have the inspection report and appraisal in their back pocket when it comes time to negotiate a selling price and terms.
My advice to sellers is to review their current market position with their agent. Take a close look at year-end sales to arrive at a realistic and competitive list price. Sellers need to do what’s necessary to attract serious buyers to get their property sold. Realtors® have seen the competitive inventory and therefore can make good suggestions on how the seller can help make their home stand out above the rest.