WAIT FOR THE BEST HOME DEAL

Have Patience and Bargain Hard to get the best deal
(The article first appeared on personal finance website moneysahib.com)

The hunt for the dream home must continue, but wait for a few monthsbefore closing a deal, as both property prices and home loan rates arelikely to fall further.
Millions of those looking to own a home today are mooting if it is the right time to take the plunge. Potential home buyers would do well to make a fresh assessment of the economic scenario, reliability of their source of income and state of property market before taking a call on whether it was the right time to book a property.
The past one year has seen all industrially advanced economies comprising that of US, Japan, UK and Europe, sliding into recession, following the outbreak of subprime crisis and the consequent meltdown in the global financial system. The impact is visible in India with major economic think tanks lowering GDP growth estimates for India from over 9% to as low as 5.8% for the next financial year. Several Indian companies are going through a tough time and have reported lower earnings, put expansion on hold and cut jobs. The implication is that it has added uncertainty in the atmosphere and millions of employees are not very sure if they will be able to keep their jobs during the downturn, which is showing signs of worsening.
Therefore, every home buyer must assess as to how stable is his/her job before making a home buying decision. In addition, one must not seek a higher home loan in the hope that one would have improved capacity to pay back in the coming year. Increments are unlikely and certainly not impressive this time round. Now, the buyer must closely look at the area where he wishes to buy a home. To begin with one must have several meetings with developers, brokers and those who own homes in that area in order to understand the location, connectivity, civic amenities, law and order situation and of course the current prices in that area. The most important factor today is the prices. Real estate companies claim that prices have come down by 10-25% in most residential makrets. A buyer must make sure if prices have actually fallen.
Of late, there have been very little buying in the property market, which has put pressure on developers to reduce prices so as to lure new buyers. Besides, the government and banks too have turned up heat on developers to cut prices. Property analysts feel prices may further come down by 30%, which is when people will start buying.
So, a potential home buyer must not be in a hurry to book a home and not be swayed by the so-called attractive offer advertisements from builders. Patience possibly is a key asset for home buyers in these turbulent times. But this doesn't mean, home buyers should not look for properties they want to buy. The hunt must go on, before one zeroes in on the right product.
Waiting could also be rewarding because of the falling financing cost.In a bid to stimulate the economy, RBI has been cutting interest rates. As inflation comes down further, more cut in interest rate is likely. Lower interest rate means, one's outgo on EMI towards home loan comes down.
So a waiting period of a few months, while one bargains hard with developer or any other seller, is possibly the best bet.