Is it a good time to buy a house in Litchfield County?
Litchfield County home prices are still down overall, the inventory is also down lower than it has been in a long time. Does this make it a good time to buy? Well, if you are getting a mortgage, interest rates are pretty awesome too. So the answer is really yes, if you can afford it, it truly is a good time to buy a home in Litchfield County Connecticut.
Despite the good news above, there are a few things that can really slow the home buying process down, or bring it to a screeching halt.
If you are getting a mortgage, make sure you go to a reputable company. Get pre-approved BEFORE you start looking for a home. We will be asking you that up front, if you have not contacted anyone we can certainly give you the names of a few people in the mortgage industry with a successful track record.
Lenders have tightened up, regulations have changed, you want to know if you can qualify and for how much BEFORE you find the home of your dreams.
If you are going to pay cash for the home, you will need to prove it. When we submit your offer we also submit “proof of funds” right along with the offer. Prepare yourself for that. It doesn’t mean we don’t believe you, but you will need to put your money where your mouth is, so to speak. It is customary, and if you put the shoe on the other foot, if you were selling your home you would want to know the person making the offer had the ability to purchase your home. It is nothing personal, it is just business.
If you are putting down a large amount of money and mortgaging only a small amount you may still have to provide proof of funds. Just be prepared. You can read a bit more here, “We have a cash offer for you!”
Foreclosures and Short Sales in Litchfield County.
Are short sales a good deal? That really depends. The issue with short sales is they take time, and some longer than others. First the home owner has to accept your offer, then the lender(s) have to accept the offer. On top of that it is customary for the home owner to have a clause in the contract that states they will only go through with the sale IF the lender(s) forgive the balance of the debt owned. That detail is only provided to the home owner at the end of the process. So you could wait (and wait and wait some more) only to find that the lender is going to issue a deficiency notice to the home owner, so the owner will decide not to sell after all. So are short sales worth it? They can be, but they are not going to be the bargains you might think they are. They are not “fire sales”. Also remember in a short sale situation the home owner may not have the funds to address any issues that come up in your inspections. And they may not have had the funds to keep up with maintenance. Be prepared.
How about foreclosures in Litchfield County? I wrote a post a while back about foreclosures. It was a bit tounge and cheek, it was inspired by those infomercials that claim they will teach you how to buy a home for a very low price. You can read it right here, I want to buy a home for $1,000. If you are going to buy a foreclosure you must understand a few basic things.
- Foreclosures are often in very bad shape
- Many foreclosures are not “mortgage-able”
Buying a foreclosure is not for everyone. Many foreclosures are being purchased by investors who have the cash to pay for them and the resouces to fix them up.
How low should my offer be?
Time and time again this question is asked. It is true that you, as the buyer, are driving the real estate bus now. It is also true that there are many sellers who don’t understand this, who just cannot face this fact. You must be prepared to walk away from a house if the owner is not really ready to sell.
But how low should your offer be? Ask us, we will do a buyers market analysis for you to tell you what we think the house is worth. There are homes that are priced to sell, and these homes go far faster than those that are over priced.
There really is no magic number, no fixed percentage. Saying that all offers should start at 20% under the list price won’t work, each situation is different. There is one thing I can tell you, when asked by a potential seller how much I think their house is worth I tell them the bottom line is… your house is worth what someone will pay for it, and what their lender will loan for it.
Don’t be married to a house, that is my strongest advice. If you can’t get it for what you are willing to pay for it, you must move on! Do ask however, because sometimes homes really are worth what they are listed for, or close to it.
And if you have been looking for a long, long time and can’t find something that you think is “worth it”, perhaps you need to lower your expectations.
A few more articles of interest.
Check this page out written mostly for first time home buyers. There is mortgage information as well as tips on searching for a home. BUYING YOUR FIRST HOME IN LITCHFIELD COUNTY.
THE GREAT REAL ESTATE DIVIDE talks about the chasm between buyers and sellers.
If you are thinking about buying a home in New Milford, Bridgewater, Roxbury, Washington, Warren, Kent or Sherman, Connecticut, give me a call or send us an email. You can also start your home search on our website, Litchfield County Real Estate.