Investment propertyYou Snooze, You Lose: Market Too Fast for Fence-Sitting Buyers
Pressure! No, that"s not just the title to an old Billy Joel song; that"s
the reality many buyers are feeling over the urgency of completing the "buyer-
responsible" details of a new home purchase these days. Why? Because the
market place waits for no man right now. If buyers drag their feet holding up
their end of the bargain, builders are now simply mailing out letters of
cancellation for non-compliance, raising their prices, and moving on to the
next buyer.
When markets shift from a buyer"s to a seller"s market, it"s the builder that
may be calling all the shots, but the builder may also be under pressure by
mounting construction, land acquisition and land hold costs. Buyers who take
their time getting loan approvals, making final decisions for their options
and upgrades, and forking over deposit monies may be finding themselves out of
a deal and no longer in a position to talk up their dream home. They may also
be faced with a considerable price hike for the same house if they decide to
come back and try again. (Some builders I know are raising their prices
monthly!) Waiting for prices to go down or interest rates to dip again? Good
luck. It"s kinda like the guy who was standing on the corner downtown passing
out hundred dollar bills yesterday. What good was it if you weren"t there to
get one?
How can you avoid getting one of those horrid little letters dismissing you as
a non-performing buyer? Perform! Tie in that price by writing a contract and
stick to the agreement. If the reservation or purchase agreement calls for a
30-day window to accomplish your formal loan approval, shower the lender with
all the documentation they are asking for. Most builders will require this
important milestone before they will even let you set foot in their design
center. They have no time to spend with buyers who are less than qualified or
less than committed when the market is this busy.
Although the Design Center experience can be considered one of the more
positive and enjoyable aspects of a new home purchase, don"t make so many
special requests for customized item pricing that Design Center personnel must
constantly "get back to you" with answers. Try hard to choose from among the
builder"s many pre-priced options and upgrades. (Many builders won"t even
consider special custom requests these days, anyway) And don"t miss your
appointments! With builders as busy as they are, you may have a tough time
re-scheduling a time slot and still comply with the purchase agreement
deadlines. Take some time off from work for this, if necessary (this is the
one of the biggest investments you"ll ever make!) and be prepared with a
"wish list" of your own before you go for your appointment.
What"s great about getting all this done so early in the process is this: Not
only have you "locked in" a purchase price in a market where you may have a
chunk of equity on top of your down payment before the house is even complete;
you will also have the pleasure of sitting back knowing you have done your
part. And you can and watch it all come together before your eyes--from dirt,
to sticks in the air, to your kids playing in front on moving day. It just
doesn"t get much better than that.
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