The slowdown in the housing market has hit many people hard, especially builders, buy-to-rent investors, and those who mortgaged beyond their financial means. However, the first-time buyer might be in a perfect position to benefit from the slowdown, or at least put both feet on the home ladder. If you want to move into your first home, here are some important tips to make the most of the recession.
Buy at auction
Auctions have always been a good place to make bargains, but as the number of foreclosures increases, the type of homes that end up at auction is beginning to change. Often times, these houses are in good shape and have been repossessed simply because their owners underwent a change in circumstances and were unable to meet their mortgage payments. The bank now wants a quick sale and cannot wait for the open market when prices risk falling further while the house is vacant. This means that there are some fantastic properties to buy at auction if you have the cash to cut a quick deal.
Sellers need to sell
Those who can afford to wait and see what happens to the real estate market generally do, and if a home is on the market it is often because the owner needs to make a sale. Perhaps they are moving jobs or their family circumstances have changed, and it could be that they will accept less than the sale price, especially if the home has been on the market for some time. First-time buyers without a chain and with a mortgage can afford to make a low offer. There have even been cases of sellers throwing gifts just to secure a sale.
More home for your money
As home prices drop, larger homes become more affordable. Many first-time buyers were put off at the height of the housing boom because all they could afford was a small one-bedroom apartment, but now a real home is within reach and is an attractive proposition for young professionals who want their own place. .
Negotiate in new construction
Home builders have a hard time selling their new-build properties, and many are offering good deals to get the market moving. Bryant Homes, for example, sold some of their floors for just over half the initial sales price just to get some kind of return. While this type of offer is only available to cash-rich investors, first-time buyers can find plenty of sweeteners to lure them up the property ladder.
Government schemes
The government has a variety of schemes to help first-time buyers climb the property ladder. These are typically aimed at ‘key workers’ like nurses and firefighters and you have to meet the eligibility criteria to apply, but if you manage to get a loan from the government, you could save a lot of money on your mortgage or move to a bigger home. Than it could pay alone
First-time buyers with some cash in the bank are in a pretty strong position as house prices drop. Mortgages can be harder to come by, but if you’ve saved a good deposit, now might be the perfect time to move home. Lenders favor people with money saved and good credit scores, and of course, as first-time buyers, there is no chain to put off sellers. Even if you want to wait for the bottom of the market, there are still good offers.