Did you miss the boat on buying a home? This is a common theme I’m hearing from would be home buyers. Is this true? Did you miss a once in lifetime opportunity to buy a home at historically low rates? Well yes, interest rates have increased, but it’s not that simple.
So yes…You will not be receiving the highly sought after 2.5% interest on a mortgage that you may have heard your friends and family bragging about. But let’s talk about the real cost of that low interest rate. During the height of the seller’s market, buyers found themselves biting off more than they bargained for to take advantage of those crazy low rates. Would you buy a home without inspecting it first? Well, if you bought when rates were in the 2s it’s a chance you wouldn’t be able to ask for an inspection if you wanted your offer to be accepted. How do you feel about paying 7%-12% more than the home is actually worth? What if I told you, you had to pay that in cash. Of course, you would also have to pay all of your closing cost and possibly some of the seller’s closing cost. Would you mind letting the seller live in your home for a few months after you purchased it? What if they asked to live there for free? Oh, BTW, they won’t be taking their trash and leftovers when they leave. Yikes, this all sounds expensive. Well, this is what you missed. This is the boat you didn’t jump into. This wasn’t the case for every buyer, but a lot of buyers resorted to some or all of these tactics to win the infamous “bidding wars.”
Buying a home today is much more attainable for a lot of buyers. Prices have relaxed a bit. You may be able to negotiate the sales price. You may be able to get the seller to pay some or all of your closing cost. You will likely be able to inspect the home. I cannot understate how much money skipping an inspection can cost a buyer. Rent back agreements (the agreement to let the seller stay after settlement) are less common and usually not free in today’s market. There are so many advantages to buying home today.
You may be thinking, but what about the interest rates. My advice is to find a payment that you can afford on a home you love and refinance when the rates drop. You can also look at the options of an adjustable-rate mortgage that usually has a lower intro rate. Sometime the introductory rates last as long as 7 years. You can also ask the seller to buy down the interest rate down. There are many options. You did not miss the boat. The best time to buy real estate is when you need to buy real estate!
Your Real Estate Girl 