The Waiting Game - What Buyers Don't Get

Most of the buyers I talk to lately all say they are waiting a few more months before they start looking. The primary reason they give is because they feel that prices are still dropping. This seems like an intelligent enough response as who wouldn't want to pay less for the same home if all they have to do is wait a few months?

What usually stumps them is when I ask them how much more do they anticipate prices will drop? Assuming a home is now $650,000, how much do they expect it to be in 3, 4, 5, 6 months if it has already been reduced from prices a year ago by say, $50,000? If you are a waiting buyer, think about this so that you know when it is time to act so you don't get caught in the procrastination game forever. While enjoying the benefits of home ownership, many owners groan when they recall how much of their hard earned money was dumped paying rent over the years as they dragged their feet. Renting is not a bad thing as it is a wonderful temporary option but it has no future benefits.

If you are renting while you wait it is important to calculate your anticipated savings accurately. Once you answer the question above as to how much you expect to save by waiting, subtract from that number the total rent you will have paid for those waiting months. What you probably cannot calculate without help from your accountant is the tax savings that you would have received from home ownership in those months. In the end, the savings anticipate d by waiting may not be as drastic as you expect, particularly if interst rates increase from today's rates.

What buyers really don't get is that sellers don't set the prices. Real estate agents don't set the prices. As a whole, buyers set the prices. Typically buyers wait until Spring. It is historically the busiest time of the year for sellers to sell and buyers to buy. Because of this, sellers prefer to sell their homes in the spring because they can usually sell their home for around the asking price, assuming it is not over priced.

If all the buyers wait until Spring, as is historically the case each year, the demand increases which then allows sellers to hold to their desired price since there's a good chance another buyer will come along. In the current market, there are fewer buyers so sellers are eager to make an offer work since it may be their only offer until Spring comes around. So, waiting buyers, isn't it possible that you could get the same price on a home today as the price you are waiting and hoping to get in 3-6 months? In doing so, you would also get the tax benefit sooner and be able to take advantage of the low interest rates.

If you are a buyer, you may still choose to wait but at least you 'get it' and understand some of the potential losses and gains of the waiting game.

Either way, while you wait, educate yourself on home prices in the areas you might want to buy in. You can search the mls and access free buyer/seller reports from endless sources on the internet including http://www.4sdhomeinfo.com. When you are ready, or even before you are ready, arm yourself with a good Realtor!