I previously wrote a post called “How Much Does it Cost to Buy a House?” Since then, our economy has improved, the housing market has turned into more of a seller’s market, interest rates have started to creep upward, and lenders have come out with some new programs. Of course there are items that you should always expect to pay regardless of the market like $500 for an inspection, some lender fees, and pre-paid items like costs to setup escrow accounts; but with a changing market, comes changing costs and programs.
Even though mortgage rates are moving up slightly, they are still way better than they were a few years back. Since rates are still good, home buyers are still ever-present. Sellers are recognizing that they can sell their home in 24 hours, so they are able to be pickier with who buys their home. For instance, if you are buying a home in a desirable, fast paced market (like the Highlands, St Matthews, Clifton, or Crescent Hill) you need to be ready to buy the home as soon as you see the home. If the seller of that home has a good Realtor to price it correctly and make sure that it is ready to sell, then they will know that the home will sell quickly. If that seller gets three different offers on the home (which is happening a lot right now), they have to choose which offer is strongest in their eyes, but keep in mind that there is more to an offer than just the sale price. Let’s say that all three offers are for $200,000, which is equal to the listing price of the home. If two of the offers are asking for the seller to pay part or all of the buyer’s closing costs, the seller will most likely pick the one offer that doesn’t require them to pay buyer’s closing costs. Even though the sale price says “$200,000” on all the offers, the seller will have to deduct the $2,000-$4,000 for closing costs from that number, so the net number is actually different.
This is not to say that sellers won’t pay closing costs right now, but in a market that favors the seller you need to understand that they have an upper hand. On the other end, if I see a home that has been listed for sale in the Highlands right now, and it has been on the market for 30 days or longer, that seller does not have the upper hand anymore. This is one of the reasons you need a Realtor that works for you to find the right house. There are different costs associated with different homes and only someone that knows the market can tell the difference. Let’s say that there are three different houses and each one of these houses is listed for $200,000. Depending on whether or not they are priced correctly, how long they have been on the market, the street, the features, the amenities, etc; the home buyer will end up spending a different amount of money on each of these homes. It is my job to make sure that you do not overpay for a home. It is also my job to make sure that you will be able to eventually sell that home, if you have to some day.
Call me if you are thinking about buying or selling a home this year. I sell Louisville homes with a focus on service.
502-509-9278 – firstname.lastname@example.org – The Thomas Group at Keller Williams Realty Louisville East