Should You Buy A Home Now Or Wait Until Prices Drop Further?

Author: Andrew Webber

Timing is one of the biggest concerns of many prospective home buyers today. It is certainly a fact that home prices have dropped considerably in many areas around the country during the last two to three years. Yet, there are also indications that prices could continue to drop in the coming months. This has left many prospective buyers in a quandary as they wonder whether they should make their move now and buy or wait to see whether prices will drop further.

The complex real estate market which is now a reality is certainly confusing. While low interest rates, record price drops and a significant number of homes on the current market would certainly seem to indicate that now is the right time to buy, there are some buyers are still hesitant to make the move.

That is certainly understandable, considering the fact that lending restrictions have tightened, foreclosures have reached an all-time high and there is still quite a bit of uncertainty regarding housing values.

Perhaps the most important guiding factor that should be taken into consideration when thinking of whether now is the right time to buy or not is whether you plan to be in the home for quite some time. There is no getting around the fact that prices could very well continue to drop. If you are thinking of purchasing a home in the current market; however, and you think you will be in the home for quite some time in the future, it might not affect you as much if prices do continue to fall in the coming months. This is because while the market is certainly gloomy at the moment, it is certainly expected to rebound in the future. This is not the first time the real estate market has experienced a slump and just as in times past, experts expect that it will eventually settle.

If you are thinking of becoming a homeowner right now; however, you do need to make sure that you are fully prepared. This means making certain that you have a sufficient down payment and your credit is strong as well. When the market was hot, these two factors would have been considered to be a bonus to lenders.

That is no longer the case today; however, as lenders have found it necessary to tighten lending restrictions.

The simple fact of the matter is that mortgages are not as easy to obtain as they were even last year. Due to the fallout of the subprime market and the rising amount of debt that is spreading across the country, lenders must be more cautious. Now it is even more essential that buyers have the down payment in order to qualify for a mortgage loan.

Buyers who have the down payment available to them right now and who have found a property that interests them may very well be better off going ahead and making the decision to buy now rather than trying to wait it out. Currently, sellers are more than willing to negotiate regarding price and terms. When, and not if, the market begins to bounce back and swings more into becoming a sellers market again, the flexibility on price negotiation will probably disappear. Ultimately, if buyers think they are going to stay in a home for at least five years, they probably are not going to be at risk of losing money on their home, even if prices do drop a bit further before the market finally begins to rebound again.

Currently, not only do buyers have a tremendous amount of leverage in terms of price but there are also many other types of seller concessions that are being offered as well. One of those options is the ability to frequently negotiate regarding closing costs. In many cases, sellers today are willing to pay a portion of the buyer's closing costs if that means they can sell their home faster. This can free up more money for buyers either to put toward the costs of their down payment or save out-of-pocket cash that they can then use in settling into their new home. For first-time home buyers, this can certainly bring a lot of appeal.

Ultimately, the decision regarding whether now is the right time to buy is a personal one; however, fear that the market may drop further should not prove to be frightening enough that it deters a serious home buyer from the advantages available in the current market.

About the author:

Andrew owns a website that provides many Home Buying Help. You can visit his website at: http://www.buy-and-sell-house-fast.com/home-buying-guide.shtml