East Oregonian : E.O., January 20, 2017, Page 11M, Image 29

January 2017 // Real Estate & Home Builders Guide // 11M
By Ilyce Glink
and Samuel J. Tamkin
Tribune Content Agency
W
hen we talked about
New Year’s resolutions
for 2016, we said, “Be
prepared to see higher prices and
fewer homes on the market.”
And, that’s exactly what
happened. More people wanted
to buy homes and fewer people
decided to sell, which made
2016 one of the strongest seller’s
markets in recent years.
Unfortunately, 2017 looks to
be more of the same. According
to Doug Duncan, Fannie Mae’s
chief economist, homeowners are
staying in their homes longer, and
the super-low interest rates we’ve
seen since 2012 mean that it’s
often less expensive to stay rather
than downsize.
Low housing inventory means
that prices will continue to
rise. Rising interest rates mean
affordability will be impacted,
particularly for fi rst-time buyers.
So, if you’re planning to buy in
2017, you’ve got to be prepared
for even higher prices and higher
interest rates.
The best defense is a great
offense. If you’re going to buy,
be prepared. Here are some home
buyer resolutions you should make
if you’re preparing to buy a home
(particularly a fi rst home) in 2017:
1
BE PREPARED FOR
RISING SALE PRICES,
INTEREST RATES
IN 2017
THINKSTOCK IMAGE
- Know how much you can
afford to spend. As interest
rates rise, the amount you can
afford to spend will fall. So, know
what you can afford ahead of time
and be sure to get pre-approved
for your mortgage (as opposed to
pre-qualifi ed) so that you will be
able to act quickly when you fi nd
the right house. Also, there’s a
difference between what lenders
tell you is affordable and what
will feel comfortable for your
pocketbook.
2
- Understand the total
costs of homeownership.
Yes, there are the cost of the
mortgage, real estate property
taxes and insurance. And then
there’s the cost of heating and
cooling your future home which,
as temperatures often dip well
below zero in the upper half of the
country, is a reality you should be
prepared for fi nancially. Mainte-
nance is typically underestimated
by home buyers, especially
fi rst-time home buyers, so be sure
to set aside enough in your budget
for small things (like blacktopping
the driveway every year or two)
and big ones, too (like re-roofi ng
or tuckpointing).
3
- Think about how easy
(or hard) it will be to sell
before you buy. Whatever
attracts you to a home will be the
thing you lean on when it comes
time to sell. But just because
you can overlook a major fl aw
(a highway in your front or back
yard, or a municipal waste facility
across the street, or some other
reason the location is undesirable)
doesn’t mean future buyers will
-- unless the price refl ects that.
Which just means you should
expect lower than average
appreciation. If the hurdles are
too much for the majority of
buyers, then you need to push the
seller to give you an even more
advantageous price.
4
- Understand the art of
negotiation. This past year
was all about sellers. And, 2017
will also be a seller’s market. That
means you have to be prepared to
pay more and get less. But, there
are still deals to be found. You
just have to look harder. We’re
always amazed that some people
spend more time picking out a
new car than picking out their
new house. Don’t be those people.
Take your time. Understand
where you want to live, and then
fi nd the people who can help you
fi nd whatever deals exist in those
areas. Typically, those will be ugly
houses that need cosmetic fi xes
rather than structural ones. Don’t
be afraid to paint!
Finally, remember that real
estate doesn’t have to be a zero
sum game. Just because you win
doesn’t mean everyone else has to
lose.
The best real estate deals allow
everyone to shake hands and
walk away from the table feeling
like a winner. And in this year of
uncertainty, disappointment and
just plain incivility, spreading a
little extra goodwill during the
negotiations and at the closing
table seems like a very good idea
indeed. We promise it will pay off
in spades.
Happy New Year!