Fewer Sellers Reducing Prices
If you've been waiting for the seller to reduce the price of your dream home before making an offer, be advised that fewer and fewer sellers are volunteering to reduce their asking price. So, your wait may be long and futile.
According to news just released by Zillow, fewer U.S. home sellers cut their prices in August. Of all the homes listed for sale on the Zillow site, prices had been cut at least once on 28.8% of them by the end of August, 2010. This is down from July's 30.1%. In September of '09, some 32.6% of listed properties on Zillow had experienced at least one price reduction. The median price reduction was 7% in August. The median was the same in July. The cities with the largest price reduction, according to Zillow, were Tucson, Arizona and Portland, Oregon.
I have to be honest with you about this. If you are a buyer right now, why on earth would you sit on the sidelines waiting for a seller to unilaterally drop the price?
Buyers today have all the advantages. Real estate prices are at near record lows. Many sellers are just plain desperate to sell and will look at any offer. Mortgage interest rates are at or near record lows if you qualify. Nationally, the selection of properties in all price ranges is at near record highs, so you have plenty of homes from which to make a selection.
Buyers gain nothing by waiting. First of all, you may lose the property when some other buyer comes along and takes the initiative to make an offer while you're waiting for the seller to cut his price. Remember, if you like the house, others will too! Second, interest rates may go up. If they do, you may find yourself with a higher monthly payment even if the seller agrees to your price. Third, property taxes and insurance premiums may increase while you're waiting for a price reduction. Remember, most government taxing authorities are desperately looking for ways to increase government revenues, and insurance companies are for-profit organizations that just love to make homeowners pay higher premiums for the same-or-less coverage. Finally, the seller may never reduce his price and elect to simply take the house off the market.
So, there is a down-side to waiting that may outweigh the possible gains from a price reduction.
My advice is to act now. If you don't want to pay what the seller is asking, make an offer for what you are willing to pay for the house. Then, negotiate, negotiate, negotiate. That's how great deals are forged on homes today.
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According to news just released by Zillow, fewer U.S. home sellers cut their prices in August. Of all the homes listed for sale on the Zillow site, prices had been cut at least once on 28.8% of them by the end of August, 2010. This is down from July's 30.1%. In September of '09, some 32.6% of listed properties on Zillow had experienced at least one price reduction. The median price reduction was 7% in August. The median was the same in July. The cities with the largest price reduction, according to Zillow, were Tucson, Arizona and Portland, Oregon.
I have to be honest with you about this. If you are a buyer right now, why on earth would you sit on the sidelines waiting for a seller to unilaterally drop the price?
Buyers today have all the advantages. Real estate prices are at near record lows. Many sellers are just plain desperate to sell and will look at any offer. Mortgage interest rates are at or near record lows if you qualify. Nationally, the selection of properties in all price ranges is at near record highs, so you have plenty of homes from which to make a selection.
Buyers gain nothing by waiting. First of all, you may lose the property when some other buyer comes along and takes the initiative to make an offer while you're waiting for the seller to cut his price. Remember, if you like the house, others will too! Second, interest rates may go up. If they do, you may find yourself with a higher monthly payment even if the seller agrees to your price. Third, property taxes and insurance premiums may increase while you're waiting for a price reduction. Remember, most government taxing authorities are desperately looking for ways to increase government revenues, and insurance companies are for-profit organizations that just love to make homeowners pay higher premiums for the same-or-less coverage. Finally, the seller may never reduce his price and elect to simply take the house off the market.
So, there is a down-side to waiting that may outweigh the possible gains from a price reduction.
My advice is to act now. If you don't want to pay what the seller is asking, make an offer for what you are willing to pay for the house. Then, negotiate, negotiate, negotiate. That's how great deals are forged on homes today.
-30-
posted by Terry Ward at 3:53 AM
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