Myths about today’s Housing Market. Some buyer and seller Myths in this changing Real Estate 2022
Myths about the competitive real estate market we are in today. This is a very competitive market. And there are a lot of beliefs about what’s happening in this market or what will happen.
This is May 2022. Well, here’s the reality for the buyers. And I’ve had my own buyers call me and say should I wait and I tell them, you may not want to wait, according to the predictions and the outcome that they’re expecting in the next year in two or three years. Experts are saying that the prices are still going to go up two to 3% for the next two or three years. And I believe so too because even after five and a half percent interest rate, there are multiple offers, and these bidding wars, of course, they’ve slowed down, but the prices are still staying high. And here’s why you may not want to wait.
You don’t know if the prices are going to drop, they may drop two or 3%. Or they may drop 15%. You don’t know that and you don’t know when that’s going to happen.
If you pay high rent you lose your downpayment, the other issue is for sure for the next few months, because of the inflation rate of 8%. As of today, the feds are going to increase the interest rate. So if you wait for a house to drop from $800 to let’s say $750. And you pay the mortgage from 5% to five and a half percent, guess what the $750,000 house is costing you more than the $800,000 house.
Those are the two reasons you may not want to wait. The other thing is the more you wait, the more you procrastinate, you lose your tax benefits, and you lose your down payment every month going into rent. By the way, rents have increased anywhere from %10 to 20% in the Orange County area just in one year. So think about that seller Myth number one, sellers are thinking I can ask whatever price I want because the market is still very strong. Well, that was true 2,3,4 months ago, a year ago, where if your neighbor’s house sold for a million dollars, and you have a similar model similar house, you could get away with asking for $1,050,000 or 1M and $100,000. In today’s market as of May 13, 2022. You may want to be competitive and ask an expert realtor like me or any realtor in your area, what the comps are, and what’s happening in your specific area in your zip code market is stabilizing. Prices are not jumping, multiple offers are coming in. But instead of 10 and 20 that we used to have, we’re getting one or two or three offers coming in. So the prices are stabilizing. They’re still good prices, but the sellers have to be careful and be very competitive in marketing their home and selling their home. Now the market is changing. There are multiple offers in today’s highly active market, so you want to be the best offer. So you were going to take out the appraisal contingencies and the repair contingencies. And you may not take out the inspection contingencies. Although the sellers are selling the house as-is, I highly recommend that you do the inspection. At least you know what you’re getting into. I just sold four units right now, and it looks pretty good. But according to the inspection report, there’s a lot of work in the unit. So it’s going to cost the buyer 1020 ($30,000) to fix it before you close escrow, you want to do an inspection and then decide if you want to proceed with the escrow or cancel or ask the seller to do repairs even in this competitive market. Because the last thing you want to be is when you move in, you want to be disappointed and find out we have a lot more work than you thought of but when you don’t have the money to fix it and number two, you don’t have time to fix it. So highly recommend an inspection in today’s market. You may get more money by fixing it but remember you pumping more money into your house. You spend so much time in your house. And that’s great. You may get more money. The thing you don’t want to do is let’s say I’ll give an example you want to change the carpet because you have pets and it’s dirty and it’s smelly, and it’s worn out. So if you want to change the carpet that may be a good idea. But what if you change the carpet, a pink color or purple color, any color, and the buyer loves your house but does not like the carpet because they are allergic and they want to chain the carpet and put wooden floors then they may not pay you for the carpet and other remodels. So it’s best to get an opinion of a real estate expert in your area. You can always call me for some information or have other videos that you can check on what to do before you sell your home feel free to browse my channel and before you renovate and spend all the money get an opinion and see how the market is there is always a buyer for homes in as-is condition. So if it’s convenient for you not to fix it, if you still gonna get the price market value in the condition that may be an option. It’s a tough situation. So you need expert advice on whether to fix it or not. There are some things you may want to fix. But when it comes to renovation, it needs some thought.