Q: What is a buyers’ market?
A: Two major factors that drive a buyer to buy are the availability of a great supply of affordable homes to choose from and the attractiveness of a low house payment versus renting.
Q: What is driving all the buyers out of the rental market and into the buying market?
A: The answer is simple: saving money. First-time buyer Jose recently closed on his three-bedroom house in Sun Valley. His monthly house payment is only $725. Jose used to pay $1,000 for a rental that he will never own.
Q: I recently short-sold my house. How soon can I buy again?
A: The federal guideline for re-purchase after a short sale is three years. Or you can check into a lease-to-buy program right now. Most lease options offer rent credit toward your future purchase price.
Q: How many homes are available in Sparks that are priced under $150,000 and are newer?
A: Today’s MLS search for three-bedroom homes priced under $150,000 and built in 2000 and newer return a total of 78 homes. However, only nine of these 78 homes are available. That is an 11.5 percent availability, which is a low availability for Sparks, meaning buyers are taking advantage of the buyers’ market and our supply of affordable homes is getting low.
Q: How many three-bedroom newer homes are available in Sparks under $200,000?
A: There is a total of 104 homes in the $151,000 to $200,000 range. These are three-bedroom homes that were built in 2000 and later. The availability in this price range is much better: 39 homes are available, or a 37.5 percent availability. Affordable homes that are priced under $150,000 are more desirable.
Q: Will home prices go up significantly when the supply is low?
A: That is difficult to say. Home owners can expect a slight increase of home values when supply is low. It is safe to predict a 1 to 5 percent increase in the newer neighborhood in the next year.
Q: Will we have a multiple offers bidding war again?
A: It is already happening. I get phone calls and emails about my pending listings from other real estate agents asking if their buyer can bring me a backup offer.
Q: Are backup offers welcome?
A: Yes. Sellers always welcome backup offers. When the primary offer falls out, the backup offer can move up to become the primary offer.
Q: What are the chances of a backup offer getting the house?
A: The likelihood is about 50/50. When the primary buyer becomes unemployed/under-employed, he no longer qualify for a home loan and will have to cancel his offer. Then, the backup offer will move up to the primary position to buy the house.
Q: What causes a buyer to cancel an offer?
A: Buyers usually cancel their offers if a house cannot pass appraisal and/or inspection guidelines. Homes that are in bad shape will not pass appraisal (e.g., a leaky roof). Homeowners that are losing their homes usually are not in any financial position to make repairs for the buyer. Buyers that are using an FHA or VA loan to buy their homes should be careful to avoid making offers on older homes that appears to be in bad shape.
If you are a renter, this is still a great time to buy. Your house payment is still lower than what you have been paying for a rental you will never own in the lower price range. The American Dream of home ownership is more affordable than ever.
Annie Christian is a real estate broker and owner of The Annie Christian Real Estate Group. She helps with everything from buying and selling to foreclosure and short sale. To submit a question, call 351-5117. Her website is www.anniechristian.com.