For years leading up to the recession, people got used to their home being as asset that boosted their net worth every year. Some people quit their jobs to focus on their real estate investments, flipping houses and making big profits within a few short months. As we all know, the real estate world got turned upside down beginning in late 2006 in most regions and its been an area of concern for homeowners ever since. The concern in real estate isn’t making money now nearly as much as it’s seeing the home value at least on par with what the homeowner owes the bank.
In spite of the headwinds in the housing market, 2010 should be a year of great opportunity for some owners and potential owners of real estate. A recovery seems to be on the horizon and there are opportunities for buyers, sellers, and for homeowners that plan to stay put in 2010.
Real Estate Buyers: Make no mistake–in spite of home prices showing some signs of stability and pending home sales increasing over the past few months, this is still a buyer’s market. Buyers have the power when it comes to negotiating with sellers and most sellers are willing to be flexible in their pricing as long as they can out least get enough out of their home to make the bank happy. Don’t be afraid to bid aggressively as many buyers just want to get out from under their mortgage payment. Buyers also are in a great position because mortgage rates remain very low and are likely to stay that way as the Fed continues using its influence to keep mortgage rates from rising. Finally, the tax credits available to home buyers that are available through June make this a great time for buyers to make a decision.
Real Estate Sellers: The good news for a seller is that prices seem have bottomed out and are on the way up again. The increase will be slow because of the huge amount of inventory on the market and the tentative nature of real estate buyers right now, but it’s sure nice to see home prices increasing again. If you have the ability to delay the sale of your home, it wouldn’t be a bad idea to let prices recover as much as possible before selling. If you have to sell, consider what you’re up against. Many foreclosures are left in a state below what most potential buyers are looking for so make your home stand out with fresh coats of paint, attractive landscaping, professional staging, and general good conditions. Buyers are picky in this market so making your home stand out will increase the chances of receiving an offer.
Real Estate Owners: If you have no plans to move then the best thing you can do right now is to consider refinancing your mortgage loan. It’s not easy in a home where your equity position has fallen below what you owe, but as home values improve some lenders will be more willing to work with you again. Consider increasing your equity with basic, cosmetic changes that enhance the appearance of the house without breaking the bank.
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