A Buyers Market
04/05/2007

Sellers are definitely having to work harder for their sales these days. Whereas a couple of years ago, sellers had multiple bids for their properties, times have changed. The days where buyers had to outbid each other are over and now it’s sellers who have to make the concessions.

However, buyers are now facing added pressures from lenders. One of the reasons for the housing boom of the past few years was the ease at which some lenders were willing to give credit. Mortgages were approved for people with a somewhat chequered credit history. Loans were offered with low ‘teaser rates’ but, what people didn’t really take into account was that the rates on these adjustable rate mortgages increased significantly after a few years. These lenders are now paying a heavy price for offering these high risk loans and some of them are going out of business. So, lenders are now getting nervous and are getting a lot more choosy about who they lend to.

The lenders are moving back to a more sensible approach when assessing whether a person has the ability to repay their debts. So, although buyers do hold the upper hand when negotiating for their homes, they still have to find the finance from a lender. And this may not be as easy as a few years ago. Buyers can expect to be scrutinized more thoroughly before they get their mortgage application approved. This is a positive step in the long term as less people will find themselves in financial difficulty.

So, buyers who have a decent downpayment and a good credit record will find that this is s great time to enter the housing market. Prices aren’t expected to increase in 2007 but many analysts are forecasting a more robust recovery in 2008. There are some great deals for buyers at the moment and sellers are a lot more flexible in their pricing at the moment. Buyers have much more choice as there is a lot of oversupply in the market now.

But buyers need to be aware that all sellers have a price that they are not willing to go under and that driving a hard bargain may not be the best option as there are other buyers out there.

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