Overpaying VS Interest

Posted by Michael Perna on Friday, March 19th, 2021 at 4:22pm.

 

One of the common thoughts we have been hearing from our clients is that they want to capitalize on their current increase in home value, but do not want to overpay for their next home if they were to sell today.

 

This is a very understandable statement, as home prices have shot up in the past months due to the lack of available inventory on the market. But to fully understand what the actual price of that next home may be, we have to look at a couple of important variables that come into play.

 

Working with an agent or team who provides expert negotiating skills can not only net the best price on a home sale, but on a purchase as well. Price is an important term when considering an offer on a home, but as we have been seeing in today's market it is not the only term that a lot of sellers are looking for. Terms such as occupancy can play a vital role in many negotiations on homes, as sellers are also likely looking for their next home. So being able to offer a longer occupancy time to a seller can provide tremendous value in itself. We have had a number of transactions in past weeks where we were not the highest offer in terms of price, but our buyers were able to offer a longer occupancy time, which in turn won them the home for LESS money.

 

We are still seeing low-interest rates that are allowing most buyers to purchase 10-20% MORE homes for the same monthly payment. So as an example, a buyer who was approved for a home loan of up to $300k a year ago may now qualify for a loan of up to $350k, but would still have the SAME monthly payment. For those who do not desire more homes and would prefer to stay in roughly the same price range of the $300k, their monthly payment would be significantly less when compared to one year ago. So even if that home was purchased for $10k MORE than it would have sold in the past, the low-interest rate would again save them a much larger sum over the life of the loan. It is important to note that these interest rates will not last forever, so waiting to make that next purchase (even if the home is purchased for less than today's market value) may cost much more in the long run.

 

If you are looking to make a move, give us a call at 248-221-1224 to get started! Ask about our Ultimate Home Marketing Plan designed to get our sellers TOP DOLLAR for their homes, or our one of a kind 8 Point Plan designed to locate homes not yet on the market for our buyers!

 

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