Sunday, February 3, 2008

Avoid Being “The Biggest Loser” in this Changed Real Estate Market!

For the past couple of years now, the term “Buyer’s Market” has been synonymous with the real estate market. Obviously this is the opposite of the “Seller’s Market” term that had been used for the prior decade. I too, tossed around these descriptions until recently. A few months back, I decided when I use these terms I negatively affect half of my clients.

A buyer’s market, defined as a market with many sellers and few buyers, gives the impression that all buyers are winners making the sellers the losers. Likewise, in a seller’s market, with fewer sellers than buyers, there was an implication of the sellers getting the upper hand in every deal.

But here’s the rub: In this market, not ALL sellers lose and not ALL buyers win.

A seller that purchased a home in the early 1990’s, maintained it properly, diligently made payments and didn’t refinance out all of their equity can sell a home today at a handsome profit. This seller is in no way a loser.

A buyer who purchases a foreclosed home from a bank without a disclosure for a price well below the value of neighboring properties then discovers toxic black mold in the walls costing, a failed septic system or cement in the plumbing with unexpected repairs in the tens of thousands is not a winner.

These situations are part of today’s CHANGED real estate market. Yes, that is how I describe the market now. I avoid the phrases, “buyer’s market” and “seller’s market” and used "changed market" instead. Face it,
the market has changed. But there can be winners on both sides of the transaction.

Here’s a case in point: A savvy young couple, who wanted to take advantage of the glut of new construction models on the market last year in the Forest Lake area and sell the Anoka County starter home they had outgrown, were winners! They negotiated with a major builder on a perfect model and saved over $30,000 on the price. Then after making all necessary repairs, they listed their home at a rock bottom price equal to what they had paid for it four years earlier, and sold it in less than 60 days.
Did they lose money on the sale of their previous home? Probably. But this educated couple realized they were not losers. Their gain from the builder far outweighed the money they lost on their sale. Had it been a hot “Seller’s Market” they might have sold their starter home for a few thousand more but the builder would never have negotiated the drastic price reduction. All parties in this transaction were winners all the way around…The buyer of the starter home got a great deal. The move up couple sold quickly and got and awesome deal. The builder reduced their home inventory. Win. Win. Win.

This is just one example of the success stories I have witnessed this past year in this CHANGED real estate market. I know of dozens of examples of other individuals and families, both buyers and sellers, who are winners in this market.

Is it your turn to be a winning home buyer or home seller? If you are thinking that now is the time to make a move but the constant gloom and doom of the media has you sitting on the fence about buying or selling, contact a Realtor to help you assess your situation. Getting professional real estate assistance from the get-go is the best way to win in this changed market.

The young move-up couple in the previous story had contacted me months prior to finding their dream home to figure out a plan of action. I give sellers throughout the north and east Twin Cities metro area realistic facts about how to get their homes ready and where they need to be priced. They were prepared and ready to negotiate realistically with buyers when an offer came in on their property.

Sellers who are upside-down with their mortgage can also be winners in this market. Being upside-down is when you owe more money on a home than it would sell for on today’s market. Working with a Realtor that knows how to work with a bank to negotiate a short sale for their home and save their credit rating is a win for that seller. A foreclosure on a credit rating will become a huge red flag that will stay on your credit report for nearly a decade.

When I meet first time buyers, I give them a packet of information on how to buy a home so they are prepared for what to expect in the process. Before we start deciding whether to look at homes in Forest Lake or Hugo, I make certain my buyers are pre-approved for a loan with a reliable mortgage broker who will get the job done. Clients understand exactly what they can afford and what their payment will be. Then I discuss with my buyers the opportunities and pitfalls when looking at foreclosed homes, short sales, new construction and owner occupied homes. Prepared clients are then ready to jump on the perfect house and when the situation arises. With my expert assistance, buyers understand how to finesse a low offer as a starting point to negotiations so they can get their dream home at a price acceptable to both parties.

Are you ready to make a move? Team up with a great Realtor and get educated! Whether buying or selling a home in today’s market, there is no reason to be the biggest real estate loser. Win-win sales are possible and are my goal in every transaction!
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If you are buying, selling or relocating to Minnesota and need help from a professional Realtor, give me a call or visit my website for a FREE Relocation Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.