Buyers

Should I buy now or wait for rates to drop?

June 21, 2024 By ctaylor Leave a Comment

Buying a home is one of the most significant investments you’ll ever make, and timing can have a considerable impact on your overall experience and financial outcome. Here are several compelling reasons why buying now, even with higher mortgage rates, might be more advantageous than waiting for rates to drop:

Current Market Conditions Favor Buyers

Less Competition: With higher mortgage rates, fewer buyers are currently in the market. This means you have a better chance of finding your dream home without facing multiple offer situations and bidding wars.
More Negotiating Power: Sellers are more likely to negotiate on price, closing costs, and other terms when there are fewer buyers. This can result in a better overall deal for you.

Home Prices are More Stable

Potential for Lower Prices: When fewer people are buying, home prices tend to stabilize or even decrease. By purchasing now, you might be able to buy at a lower price than when the market heats up again.
Equity Growth: By buying now, you start building equity sooner. If home values increase as expected, your property’s value will rise, giving you more financial leverage in the future.

Future Market Conditions

Increased Competition: When mortgage rates drop, more buyers will enter the market. This increase in demand will likely lead to higher home prices and more competition, making it harder to find a home that fits your needs and budget.
Multiple Offer Situations: Lower rates attract more buyers, leading to multiple offer situations where you might have to bid higher than the asking price, potentially spending more than planned.
- Loss of Negotiation Power: In multiple offer situations, buyers often lose negotiation power in several areas. Sellers are less likely to agree to concessions on inspections, appraisal contingencies, and other terms of the purchase offer. This means you might have to accept the property “as-is” or be more flexible with your conditions to make your offer more competitive.

Financial Strategies

Refinancing Opportunities: If you buy now with a higher rate, you can refinance when rates drop. This means you secure the home at today’s prices and can take advantage of lower rates later, potentially reducing your monthly payments.
Tax Benefits: Mortgage interest is tax-deductible, and the sooner you buy, the sooner you can start benefiting from these deductions.

Personal and Financial Readiness

Current Financial Stability: If you are financially ready to buy now, it may make sense to proceed rather than wait. The perfect time to buy is when you are prepared, not necessarily when market conditions are ideal.
Housing Needs: If you have a pressing need for housing—such as a growing family, job relocation, or other personal reasons—waiting for lower rates might not be practical.

Investment Potential

Rental Income: If you’re considering purchasing an investment property, buying now means you can start generating rental income sooner. This income can offset your mortgage costs, even at a higher rate.
Future Value: Real estate generally appreciates over time. By buying now, you position yourself to benefit from future market appreciation.

Conclusion

While it may seem counterintuitive to buy when mortgage rates are higher, the current market conditions provide unique opportunities that may not be available once rates drop. By purchasing now, you can take advantage of less competition, more negotiating power, and the potential for lower home prices. Plus, you can always refinance later to benefit from lower rates while enjoying the equity and appreciation gains of owning a home. Ultimately, the best time to buy is when it aligns with your personal and financial readiness, not just the market conditions.

Putting Off These Home Repairs Could Be Dangerous – Have You Addressed Them?

May 23, 2017 By ctaylor 1 Comment

For all homeowners, adhering to a regular maintenance schedule and making repairs as soon as they are needed are effective ways to avoid costly disasters. When your home is on the market, however, it is particularly important to resolve problems before they escalate. Damage to the appearance or structural integrity of the property is every home seller’s worst nightmare.

Although there are some fixes – like updating appliances or adding a fresh coat of paint – that are not urgent, other maintenance issues could become dangerous if not addressed. Here are a few home repairs that you need to deal with as soon as possible:

- A leaky roof. If you’ve noticed your ceiling leaking when it rains, your roof is most likely in need of repair. Not only is a leaky roof a nuisance, but it can cause mold growth and structural damage, and could even start a fire if water makes contact with electrical wiring. At the very least, you could face water stains on the ceiling or walls when trying to show your house – a glaring red flag for buyers. Even if your roof is not yet leaking, it may be a good idea to have it inspected for problems like damaged or missing shingles. Storms and wind can compromise shingles, causing leaks and other problems in the future.

- Faulty electrical wiring. Seemingly harmless problems like flickering lights or outlets that are warm to the touch may indicate serious threats to your home. If you notice these signs, it may mean that your electrical system is overtaxed or the home is wired improperly – which could cause an electrical fire. Call an electrician immediately.

- Clogged gutters. Keeping your gutters clean may seem overwhelming, particularly if your home is surrounded by trees. However, if the gutters become full of leaves and other debris, they will be unable to serve their intended purpose of directing rainwater away from the home and preventing damage to the walls and foundation. In addition, prospective buyers may notice the clogged gutters and assume that your home is not properly maintained. Avoid these problems by cleaning out gutters twice a year, and then using a hose to ensure that water properly flows down the drainpipes and away from your home.

- Pest invasions. Common insects and other pests can cause significant damage to your home. For example, insects like termites can devour wood framing, while rodents can chew through insulation or even wires, creating a risk of fire. Furthermore, the waste left behind by pests may be hazardous to the health of the home’s occupants. If you see, hear, or find damage from critters, assume that you may have an infestation and contact a pest control company.
- Gas leaks. A gas leak is an imminent emergency, since it could lead to fire or an explosion. If you notice a rotten egg-like odor – particularly in the lowest level of your home – get out of the house and call your gas company immediately.

Home Sales in Bloom

May 12, 2017 By ctaylor Leave a Comment

New Home Sales blossomed in March reaching their highest level in nearly a year, the Commerce Department reported. Sales were up 5.8 percent from February and nearly 16 percent from a year ago. New home inventories edged lower to a 5.2-month supply in March. A six-month supply is considered “normal” inventory.

Existing Home Sales hit their highest pace in over 10 years in March, according to the National Association of REALTORS®, with sales climbing 4.4 percent from February and 5.9 percent above a year ago. However, existing home demand continues to outweigh supply with inventories down 6.6 percent from the same time last year.

New home construction didn’t fare as well. Inclement weather during March in the Midwest and Northeast chilled residential home construction after unseasonably warm weather in February. March Housing Start numbers fell nearly 7 percent from February, per the Commerce Department. The year-over-year picture was still rosy, however, with Housing Starts up 9 percent from March 2016 to March 2017.

Economy, Markets Thunder Along
The first reading on first quarter 2017 Gross Domestic Product (GDP) was anything but rosy, as GDP came in at 0.7 percent. This was below the 1.1 percent expected and below the 2.1 percent recorded in the fourth quarter of 2016.

GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. It is considered the broadest measure of economic activity. Typically, readings of 2.5 to 3 percent signal strong economic growth.

April also brought uncertainty over the tensions surrounding global events, causing investors to move their money into the safer haven of the Bond markets. This helped home loan rates, which are tied to Mortgage Bonds, hit their best levels of 2017. Stocks around the world also benefited after the French presidential elections in April ignited a global rally.

Despite the volatility, home loan rates remain in attractive territory and still provide many opportunities for homebuyers and homeowners considering a refinance.

Should You Rent or Buy a Home? Weighing the Pros and Cons of Each Option

April 28, 2017 By ctaylor Leave a Comment

Should You Rent or Buy a Home? Weighing the Pros and Cons of Each Option

When you are looking for a new home, there are seemingly endless factors to consider: what is your price range? What type of neighborhood is right for you? How much space do you need? One of the most fundamental decisions you’ll face is whether to buy or rent a home.

While home ownership is often glamorized and renting is sometimes thought to be preferable only for those who cannot afford a down payment, both options carry advantages and disadvantages that warrant careful consideration. Whether you’re a renter thinking about making the transition to home ownership or a homeowner drawn to the idea of renting, it’s important to remember that this is a deeply personal decision that should take into account your lifestyle, goals, and financial situation.

Here are a few of the pros and cons of each option:

Buying

- Pro: The chance to build equity. When you own a home and make your monthly mortgage payments, you will gradually build equity by paying down the principal on the loan. Aside from the sense of fulfillment that comes from having an ownership interest in the property, you may eventually be able to obtain a home equity loan, which can be used to meet various financial needs.

- Pro: The possibility of profiting from your investment. Most homes appreciate in value over time. If you have the flexibility to wait to sell your home until it is worth more than you paid, you may easily walk away with a profit.

- Pro: The freedom to customize the property. As a homeowner, you typically do not need permission to decorate, paint, and renovate your home to suit your unique style and needs. Such improvements will enhance your enjoyment of the property and may boost resale value.

- Con: Substantially higher upfront costs. Many lenders require a down payment of 20 percent of the home’s sale price—which can amount to a hefty sum, even for inexpensive properties. In addition, you must be ready to pay for the appraisal, inspection, and closing costs.
- Con: The risk of losing money. Market conditions are hard to predict. Even if buying a home seems like a good investment, you run the risk that it will not be worth as much as you paid when you are ready to sell.

Renting

- Pro: Greater mobility. When you are renting, it is easier to move when your circumstances change. Even if you have to break your lease, it is less time-consuming and stressful than selling a home.

- Pro: No risk of losing money on your investment. When you are renting, you are insulated from declines in the market.

- Pro: No responsibility for maintenance and repairs. When something breaks at a rental property, the landlord is usually responsible for fixing it. For tenants, this means less expense and less hassle than homeowners face in similar situations.

- Con: Continually increasing rent. Although renters do not have to pay many upfront costs when moving into a property, many landlords raise the rent each year.
- Con: Unable to renovate the property. As a renter, if you want to change a paint color or replace the kitchen cabinets to suit your style, you cannot do so without approval from the landlord—if at all.

How to Negotiate the Best Possible Outcome on Your Home Sale

April 10, 2017 By ctaylor Leave a Comment

When your home is for sale, getting an offer from a possible buyer brings a surge of relief and excitement. However, this pivotal step is just the beginning of the long road to closing the sale. After the initial offer, you and the buyer begin the process of negotiating a mutually agreeable sale price and other conditions.

As a seller, the pressures of the sales process and an upcoming move may cause you to make mistakes in negotiations that could prevent you from getting the highest possible price for your home. Here are some strategies to keep in mind as you review offers from buyers:

Consider your strategy as early as possible in the selling process. What is the lowest price you would be willing to accept? Do you have any time constraints? What items do you feel are non-negotiable? Although these may change if your home is on the market for a long time, having a clear idea of your minimum acceptable terms will help you decide which offers are worth accepting or countering.
Trust your realtor. Even if you are a skilled negotiator in your professional life, it is best to leave negotiating with the buyer to your realtor. He or she represents your interests and has the knowledge and experience needed to help you achieve the best possible outcome.
Learn about current market conditions—as well as the buyer’s circumstances, if possible—in order to better understand your relative bargaining power. For example, if there are not many similar homes available for sale in your area, and you know that a prospective buyer wants to get settled into a new home as soon as possible, you can probably assume that you will not have to make many concessions. On the other hand, if there are several comparable homes for sale and you are under pressure to move quickly, you may need to give in to more of the buyer’s demands.
Knowing that the buyer will likely use information that you are urgent to sell your home against you in the negotiation process, try to stay as private as possible about the circumstances surrounding your move. If you have a tight deadline, are struggling financially, or are coping with other difficult circumstances like a divorce, withholding this information from prospective buyers and their realtors will help you maintain the upper hand as you strive to reach acceptable sale terms.
Consider bargaining chips other than price. While both buyers and sellers tend to focus on finding an optimal sale price, there are several other factors that can be used for leverage in negotiations. For instance, you might agree to make repairs, leave behind furniture or appliances, or pay the buyer’s closing costs.
Act swiftly when responding to offers. Even if you are disappointed by an offer, remember that a lowball price may just be part of a buyer’s strategy. Depending on buyers’ moving timelines and how much they like your home compared to others they have seen, they may be willing and able to agree to a much higher purchase price. However, the longer you wait to make a counteroffer, the more likely the buyer is to lose interest or find another home.