Answers to your Questions about Buying a Home Please scroll down for the answers to these questions. Click here to go back to the main For Buyers page.
Should I wait and save some money...or buy right now?
What time of the year is best to buy?
Should I get pre-qualified for a mortgage before I start looking?
Should I stay with one agent...or work with multiple agents?
How do list prices compare to actual sale prices?
How far above my price range should I look?
Where do I want to live?
How can I be sure that I'm not overpaying for a home?
Should I wait and save money or buy now?
This is a question every potential home buyer ponders at some point. And there is no commonly accepted "correct" answer. Your decision should ultimately involve an evaluation of your personal circumstances and an assessment of current market conditions.
Historically, home prices have continuously risen. Although there have been periods where prices drop, the long term trend shows that home ownership is an excellent investment. Many homeowners retire owing nothing on their mortgage. Most have accumulated significant wealth in the equity of their home.
I have worked with many buyers who wait to purchase a home in an attempt to save money for a larger down payment with the hope of buying a more desirable home. In almost every case, these buyers have been disappointed because they were not able to save up as much as they thought they would. Unfortunately, even after living on a very tight budget, their savings are less than the cost of the increase in home prices. Their "wait and save" decision ends up costing them more money in the long run. They ultimately end up with less buying power and less house.
A "wait and save" decision is only desirable if you have the ability and determination to save a substantial amount of money in a short period of time, and if the real estate market is not appreciating rapidly.
What is the best time of year to buy?
My years of experience tell me that the best time to buy a home is during the real estate industry's "slow" months...and November and December are the slowest. Most people are busy with the holiday season and not in the market to either buy or sell a home. During these months, there are generally fewer showings of listed homes. As a result, sellers may become anxious and they tend to be more flexible on their price. Sellers may negotiate more in order to secure a sale. When I work with buyers during November and December, I know these buyers are serious. An experienced agent should be receptive to these "holiday season" buyers.
Should I get pre-qualified for a mortgage before I start looking?
Getting pre-qualified or pre-approved is an excellent idea. The process of getting pre-approved is detailed and thorough. It gives you a good understanding of your purchasing power and your ability to obtain a mortgage. If you need assistance with this process, I can refer you to some very qualified mortgage lenders.
To understand the importance of getting pre-approved, consider the following scenario. You are a seller with two potential buyers for your home, each offering roughly the same amount. Assume that one buyer is pre-approved, and the other is not. As a seller, with which buyer would you feel more comfortable?
In short, being pre-approved can increase your purchasing power while costing you nothing.
Should I stay with one agent or work with multiple agents?
If you want an agent to work hard for you, then you should be loyal to that agent! Your loyalty will ensure that your agent makes you a priority. Some homes are sold before a "For Sale" sign even goes up. These great deals go quickly because agents contact their loyal clients immediately. You want to be one of these clients.
A good agent spends a lot of time and effort working with a buyer, with no financial compensation unless there is a sale. If an agent feels you have no loyalty towards them, s/he will be much less likely to work towards your goals. It is also important to remember that since the creation of the MLS (Multiple Listing Service), there is usually no need to work with more than one agent.
Your priority should be to find a dedicated, experienced, and competent agent. If your agent aggressively shows you all market properties, is knowledgeable and energetic, answers your questions, and is trustworthy, then exclusive loyalty to that agent will work in your favor.
How do list prices compare to actual sale prices?
In Putnam and Westchester counties in 2007, houses sold for approximately 94 to 95% of the list price. In a slower market, these percentages generally decrease by a few percentage points.
How far above my price range should I look?
Contrary to what many buyers think, most real estate agents don't actually know where a seller's "bottom line" is. We do know that in our area in 2007, houses sold for approximately 94 to 95% of the list price. If you're not in a hurry and don't mind a bit of rejection, it might be okay to "test the market" by looking 10 to 15% above your price range and make lower offers. If you don't have time to waste, then it may be to your advantage to look at homes no more than 5% above the price you actually want to pay, and also 10% lower.
I have learned in my many years of experience that no matter what price range a buyer can afford, s/he would prefer something more expensive. Keep in mind that there is a lot of equilibrium in the housing market and it is rare to find a house that is substantially under-priced. But you never know, it has happened before and it might happen to you!
Where do I want to live?
There are many factors to consider when deciding where to buy a home:
Commute to work Distance to highways or public transportation Local daycare facilities Location of stores and shopping Parks and public facilities Privacy Proximity to family and friends School districts, and distance to schools Sense of community or neighborhood Taxes
A good agent can show you many homes an area that satisfy your specific needs and desires.
How do I know that I'm not overpaying for a home?
This is a real concern of every buyer. Your first line of defense is to choose an experienced, competent agent to negotiate for you. Next, ask for a market analysis and your agent's opinion of the value of the home. Finally, if you are obtaining a mortgage, the bank will probably require a professional appraisal of the property, which will help you make certain that you are not overpaying.
I am always available to answer your questions or address your concerns. Feel free to contact me anytime by email at frattarola@aol.com or by phone at (845) 628-2400, ext. 234.
I am always available to answer your questions or address your concerns. Feel free to contact me anytime by email at frattarola@aol.com or by phone at (845) 628-2400, ext. 234.
Bill Frattarola, Jr. · Licensed Associate Broker Houlihan Lawrence · 129 Route 6 · Mahopac, NY 10541 (845) 628-2400, ext. 234 · frattarola@aol.com
