Low inventory and historically low interest rates in todays real estate market have created quasi-sellers markets in many cities nationwide. These local real estate markets, marked by short days on market and low inventory can lead to multiple offers on homes that are in good condition and move in ready. The frantic pace of the real estate market in these cities are causing buyers to make two mistakes than can have negative and long lasting effects.
Emotional Decision Making
Low inventory and low interest rates have buyers of real estate actively searching nationwide and national home sale statistics have been increasingly positive as the summer has progressed. At the same time however home sale prices remain far below their 2006-2008 peaks so many would be sellers are still reluctant to put their homes on the market, instead opting to rent them out in some cases. This decision making process has lead to a low inventory of available homes, which in turn has created a feeding frenzy any time a reasonably price, good conditioned home hits the market. In todays lightening fast real estate market it is not uncommon to see a home listed for sale receive multiple offers in the first week and be removed from the market prior hosting its first open house. Todays frantic real estate market has buyers feeling rushed to aggressively pursue the home of their dreams and these feelings can lead to emotional decision making with regard to the home purchase. In real estate, few mistakes are as grave as making decisions based on emotion. Emotion can cause buyers to overpay, settle, or worst of all make rushed financial or contractual decisions. The best way to avoid the pitfalls of emotional decision making is to find and hire an honest, reputable, local real estate agent. This agent will be able to provide experience and insight into the home purchase process in addition to comparable sales data, market statistics, neighborhood demographics and a host of other services that will help inform the buyer. As the buyer it is your job to make sure you see enough homes and understand the current market well enough to jump on that perfect home when it does hit the market. Indecision is todays real estate market will almost certainly mean you dont get the home but data and information will make you feel comfortable when you have to act more quickly than you are comfortable with. Surround yourself with experts and rely on their experience and expertise.
Not Looking 5 10 Years Out
As weve discussed previously, buyers of real estate should plan on holding a primary residence for not less than 5-10 years. Any buyer who buys and plans on reselling in less than 5 years runs the risk of not recouping their transaction costs when the property is sold. Current market conditions are obviously appealing for buyers but shouldnt let that fact alone drive the decision of whether or not to purchase a home. A more prudent decision making process requires the potential buyer to consider things like family, career, and overall quality of life considerations. If the totality of the situation points towards buying a home then consider yourself lucky because there has never been a better time to be a home buyer than in todays real estate market.
Emotional Decision Making
Low inventory and low interest rates have buyers of real estate actively searching nationwide and national home sale statistics have been increasingly positive as the summer has progressed. At the same time however home sale prices remain far below their 2006-2008 peaks so many would be sellers are still reluctant to put their homes on the market, instead opting to rent them out in some cases. This decision making process has lead to a low inventory of available homes, which in turn has created a feeding frenzy any time a reasonably price, good conditioned home hits the market. In todays lightening fast real estate market it is not uncommon to see a home listed for sale receive multiple offers in the first week and be removed from the market prior hosting its first open house. Todays frantic real estate market has buyers feeling rushed to aggressively pursue the home of their dreams and these feelings can lead to emotional decision making with regard to the home purchase. In real estate, few mistakes are as grave as making decisions based on emotion. Emotion can cause buyers to overpay, settle, or worst of all make rushed financial or contractual decisions. The best way to avoid the pitfalls of emotional decision making is to find and hire an honest, reputable, local real estate agent. This agent will be able to provide experience and insight into the home purchase process in addition to comparable sales data, market statistics, neighborhood demographics and a host of other services that will help inform the buyer. As the buyer it is your job to make sure you see enough homes and understand the current market well enough to jump on that perfect home when it does hit the market. Indecision is todays real estate market will almost certainly mean you dont get the home but data and information will make you feel comfortable when you have to act more quickly than you are comfortable with. Surround yourself with experts and rely on their experience and expertise.
Not Looking 5 10 Years Out
As weve discussed previously, buyers of real estate should plan on holding a primary residence for not less than 5-10 years. Any buyer who buys and plans on reselling in less than 5 years runs the risk of not recouping their transaction costs when the property is sold. Current market conditions are obviously appealing for buyers but shouldnt let that fact alone drive the decision of whether or not to purchase a home. A more prudent decision making process requires the potential buyer to consider things like family, career, and overall quality of life considerations. If the totality of the situation points towards buying a home then consider yourself lucky because there has never been a better time to be a home buyer than in todays real estate market.
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