Vol. 9 No. 5 May 2008
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Caveat Renter
Housing woes affecting more than homeowners
Rent is going up as former homeowners lose their homes to foreclosure or are forced to sell properties they can no longer afford. But the most disturbing trend now hitting the major national papers is what is happening to renters in properties facing foreclosure.
There have been a number of stories about renters who are served notice and told they have 30 days to leave a house or condo that is in foreclosure. Not only are they losing a place to live and forced to endure the ordeal of finding a new place, many of them are facing the loss of security deposits or last month’s rent payments. USA Today ran a story in April about a family that was out $5,000 in lost deposits and advance payments.
While housing prices sputter, rentals are going gangbusters. The average rent is expected to increase 5.3 percent this year. The median rent in Las Vegas for the first quarter of 2008 was $1,056, lower than the national average of $1,368, but higher than the comparable southwestern city of Phoenix at $939.
You’ve heard it before, but we’re saying it again: Now really is the time to buy if you can afford it. With the future of rental properties looking bleak, and with housing prices significantly lower than they’ve been in previous years, a well-positioned buyer with a strong credit history is in an excellent position to find value in the housing market. For some advice, we talked to Zolt Szorenyi, real estate development manager at Performance Marketing Group.
1.) Should a buyer wait for the market to go lower before making an offer on a house?
The market is always being driven by supply and demand. The best time to make an offer is when the buyer has time to negotiate the best possible price without the pressure of competing against another buyer. This is that time now. Waiting too long for additional price reduction may jeopardize the opportunity. Do your homework and check the comparable sold and available listings.
2.) Should you be pre-qualified for a mortgage before making an offer?
Yes. The strongest negotiating power is being a ready, able and willing buyer. Being pre-qualified or approved for a loan before submitting an offer is also a requirement by most of the banks selling foreclosure properties.
3.) What’s the best way to negotiate with a motivated seller?
Use a realtor. It will not cost you anything. Having your own real estate representative will give you access to a lot more information for your market research and they will guide you through the whole process all the way to closing to ensure a smooth transaction. Always ask for a resume with references before selecting a realtor. These days, it will be helpful if the realtor has foreclosure sale experience with the banks.
