I have been working with both buyers and sellers of real estate in Staten Island and everyone has felt a little confused lately. The sellers are still hoping for higher prices than they are realistically going to get in this market. At the same time the buyers are expecting miracles in that they think that the sellers will sell for a lot less than the listed sales price. Well of course somewhere in the middle is where most deals are struck.
In my opinion, when a Staten Island seller is presented with a solid offer from a well qualified buyer they should really try to strike a deal and sell their home. If they are move up buyers, the home that they will be purchasing will be less today than it would have been at the height of the market. So in actuality, it is advantageous to sell in a down ward market when you are trading up to a more expensive home. Furthermore, it will give you an opportunity to get into a lower rate mortgage than would have been possible at the height of the market creating a win win situation all around. The bottom line is that you shouldn’t dwell on what you could have sold at but instead if you look at the cost of the new home you will in fact be paying much less than you would have had you sold and bought at the height of the market.
Now we look at buyers. If it is good for the sellers to be making a trade up now is it also good for buyers to buy now? Or will prices drop more so that they should wait to purchase? Well for buyers it is a great time to buy for several reasons. First of all prices have come down and for the first time in history so have the interest rates. This has never happened before. While the market may soften a bit more as the possibility of more foreclosures is very real, no one can predict the actual bottom till we are out of it. By that time it may be too late to get a good deal. Most importantly, the interest rates are so low now that the chance of rates rising is much more plausible than rates remaining low. Just last week rates shot up about ½% and that means that a buyer will be paying an additional $28.79 for every $100,000 borrowed on a 30 year loan when rates jump from 4% to 4.5% as an example. If you are borrowing $300,000, that is an additional $86.37 a month over the life of the loan for a ½% rate jump.
My professional advise to both sellers and buyers is that if you find the right buyer make a deal and move on with your life plans. There is a reason why you are selling and waiting around for a better offer that probably won’t ever materialize is just prolonging the agony. For the buyers, if you find a good home that works for your lifestyle and is affordable for you financially, buy it now. Again, the benefits of home ownership are immeasurable and so much more than just dollars and cents. Don’t let a good home slip through your fingers over a few dollars in the final sales price. If it feels right go for it and looking back you will be happy with your decision.