Well, the latest news should get those buyers moving and out into the market while they still can. The credit squeeze has been predicted to get worse before it gets better.
However, this does leave first time buyers in a strong position, especially since first time buyer grants and aid packages from various institutions are largely unaffected.
There is an old proverb that says 'every cloud has a silver lining'. This can be applied to the market as it is right now. There are many houses out there for sale, if you are a first time buyer you may be able to find 'the silver lining' and pick up a bargain.
To get a bargain, you have to follow certain rules of realty investment. There is point number one: you must think of it as an investment and not think of it as buying your own home, even though this is the case.
However forget the dream house with the white picket fence and two point five children fantasy. You must set aside that type of thinking and just be prepared to get your foot on the bottom rung of the property ladder; especially now because it is what is called a buyer's market.
In a buyer's market, the buyer has the power, but this does not apply if the seller has the home on the market to 'test the waters'. You need to look for the type of seller that is definitely going to sell their home, whatever happens.
So there is point number two, you are not looking for a property; you are looking for a seller. In fact, a particular type of seller. Your realtor must know that this is the reason for your house buying: you want to buy from a seller that has to sell. There will be a reason why certain sellers will need to sell at this time and not wait.
Perhaps it is an estate sale that is holding up probate, or it may be that the seller has already bought another home and is on a bridging loan or perhaps there was a job transfer and they have to move before the year end. Who knows?
The bottom line here is that you only want to deal with sellers that are serious about selling. It is a shrewd move to take advantage of this realty climate, and the sellers will be relieved that they have a buyer interested in their house.
The tough part will be negotiating their desired price to your desired price. The property market has dropped by at least 3% nationwide this year, so bear that in mind. Your realtor will be the expert when it comes to price negotiations.
If you get your financing in place and come in with an offer that starts at 10% below their asking price, it will open the door for negotiating.
Stick with your plan and don't be tempted to go over your budget. You do not want to join the thousands who are foreclosing. When you negotiate, the price haggle can go back and forth many times. If the seller turns you down flat, they may re-think a few days later. Don't be afraid to say 'no' and look again, no is a powerful price message.
You have the advantage here, because as you chose the home from an investment angle, you are not emotionally involved with it. You can walk away if the price is not right. And you will probably have to do just that at least once.
While you are looking, keep an open mind if the original seller decides to re-negotiate. Let's face it - you may not be offering the price that they are asking, but how many buyers are offering this month?
It will be tough for you to stand your ground on the price haggling, but you have the weight on your end of the scales, so don't weaken!
