Real Estate Realities for Buyers in 2011

16 02 2011

Buyers are not taking full advantage of the housing market now, even though interest rates are hovering around 4 percent. This can change if buyers better understand a few of the following realities in today’s real estate market.
Buyers believe that they need to have a 20 percent down payment to qualify for a mortgage. The reality is that many buyers can now enter the housing market with as little as 3.5 percent down with an FHA loan. Buyers can and should enlist the help of their real estate agent to get specific figures on financing a home. With rate sheets available at open houses to show potential buyers the financial facts, agents can counsel skeptical first-time buyers through the process.

The current market has some buyers afraid of purchasing a foreclosed property for fear that the bank will take the property back because it was improperly foreclosed. Some buyers also think that they should wait to buy until the projected flood of homes comes on the market in the spring. They might be thinking if they buy now, the perfect dream home will elude them because more properties will be coming in the spring-selling season. The reality is that sellers who price their homes to sell at or below market value will still see success. They may even create a bidding war on their property. Sellers who list their properties now, early in the season, can capitalize on the lower competition. The sooner they list, the faster and higher they can sell.

Buyer fear of the national unemployment figures being currently at 9.4 percent is holding some people back. They have trouble balancing thoughts of employment, low housing prices, and interest rates. Enlisting a good real estate agent that understands the market will help alleviate this fear.

Long before first-time-buyer tax discounts, there were still great incentives for taxpayers to purchase homes. This is a tax law enacted decades ago that provides for a mortgage-interest discount. It means that the amount of your mortgage payment that is interest is a deduction in your tax liability. This deduction is significant and one that renters do not enjoy.

What many first-time buyers fail to recognize is that during the early years of their mortgages the interest deduction is fat. In many cases, it may mean a tax refund, since the mortgage company has already accounted for the interest amount you have paid. You may even be able to adjust the amount your employer deducts from your paycheck, thus giving you a higher monthly income.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: