Should you buy now? Absolutely!
June 30th, 2008 categories: Buyers
There seems to be a tiny bit of buyer hesitation because some buyers don’t think the bottom’s here yet. If you’re a ready and willing and able buyer, but aren’t quite sure when to make your move, here are some important things to consider:
1. The cost of waiting. Interest rates are now beginning to creep up again. To show you how expensive even a 1-point interest rate can be, on a $200,000 loan, and increase from 6 to 7 percent costs an additional $131 per month and $47,340 over the life of the loan. On a $400,000 loan, the same increase costs buyers and additional $263 per month and $94,680 over the life of the loan.
2. There are bargains out there! The inventory is wonderful for buyers right now, and prices have come down considerably. If you were looking at a 2,000 square foot home before, it’s very likely you now could go into a 2,500 sq ft home for the same price range. Or, the opportunity may be there to get in a particular neighborhood that was unobtainable before.
3. Everyone can be creative! If there’s a problem going forward to buy the home you love, think creatively. For example: I had some buyers that were stuck in a lease for six more months. When I explained to the sellers agent the situation, she proposed (with the sellers permission) that the sellers buy out the lease. That was the magic that made it happen! The sellers got a full-price offer minus about $12,000 to cover the lease buyout, which shaved about 4 percent from the seller’ list price. Everyone was happy and everyone was able to move on. This is just one example sellers and buyers can help each other. Don’t be afraid to think outside of the box!
4. Market conditions can change quickly. In the Asheville area, the market slow down began about 2 years ago. This is a window of opportunity to buyers, and usually this kind of opportunity won’t last very long in this area. There can be a huge swing in interest rates at any point and even the smallest increase in rates can shut out many buyers. If you’re looking for a deal, and don’t think the bottom’s here yet, you just might miss the mark. I have always explained to my clients that real estate is like the stock market - when other people are sitting out, that’s the time the deals are happening, that’s the time to buy. Have you ever tried to time the stock market? It can’t be done.
Sandy,
Thanks for reiterating these excellent points. The analogy with the stock market is right on. And if a buyer is looking for the proverbial “deal”, well, that’s where a good real estate agent is worth their weight in gold.
We love your part of the country.
Michael