When is the Worst Time to Buy a House?
People have different ideas on what time is the best for home buying. While some theories may be accurate, others could see you taking a significant hit to the wallet. The most prominent determinant factors when it comes to buying a home are inventory and interest rates. Moreover, your state’s economy may affect the demand and price of houses on the market. Whether you are looking for New Jersey home buyers or would like to purchase a home, it would be best to appraise yourself with these crucial factors.
Most homebuyers rely on the professional advice of real estate agents to determine whether it’s the right time to purchase a house in a certain property market. However, you can look out for the following factors to avoid paying exorbitant for a piece of property that could go for less under different circumstances. Take a look.
When Interest Rates Are High
Whether you are looking for an investment property or your dream home, you most probably need financing. Houses come at such high prices that it is almost impossible for you to buy them without a mortgage. Consider what sort of house payment you would like and the amount of money you will be required to put down before deciding to buy. These considerations can help you assess if you can afford to buy a home at that time.
You can find out what sale price range you qualify for by having a reputable lender run your credit before going house shopping. Poor credit can limit the extent to which a lender can finance you and consequently narrow down your options regarding the house price, location, and quality. However, different lending rules apply if you are purchasing an investment property.
When a House Has Just Been Listed
You have close to no negotiation power when you express interest in a house that is still fresh on the market. Most sellers will stick to their pre-set prices, hoping that more people will be interested in their property. For instance, if you chose to purchase a home listed a week ago, you could end up paying way over market value.
Houses that have stayed longer on the market are your best bet if you are looking for a pleasant deal. Sellers are usually wary of the fact that their properties are growing less admirable at this point. As such, you can get away with offering below the asking price and getting a magnificent deal. The secret lies in waiting just a little bit longer.
When There is Limited Inventory
Are you looking to buy a decent home without parting with an exaggerated amount of money? Then you might want to consider house hunting when there are numerous houses on the market. The high inventory gives you several choices to choose from, meaning that you are under no pressure to buy a home quickly. On the other hand, sellers understand that there is no shortage of options. As such, they will probably be more amenable to price negotiations and repairs that would have been unthinkable with limited inventory.
Right After the School Year
The real estate market floods with both buyers and sellers between June and August. Most home buyers are looking to purchase homes and move in before the new school year begins, and sellers want to make the most sales. While the inventory may be higher than other seasons of the year, the competition causes prices to go high and remain that way throughout this period.
Buying towards the end of this period or during the holiday season is an excellent idea. The market has usually quietened town at this point, with most buyers staying home for Thanksgiving and Christmas. If a seller is still showing their house during the holidays, you can rest assured that they will be more open to negotiations.
When the Property Market is Unbalanced
You have probably heard of terms like buyer’s or seller’s market. A buyer’s market represents high inventory, while a seller’s market means more buyers than listed properties. If the real estate market is unbalanced, house prices can escalate due to high demand and limited inventory. Buying at such a time would mean parting with unnecessarily huge amounts of money for a standard home.
Perfect timing plays a key role in buying your dream house at a reasonable price. You can check real estate market resources online or consult with an experienced realtor to determine whether it is the right time to buy a house or not.