This morning I had a Realtor ask me what the heck she can do to get all these buyers that are in NO HURRY to get off the fence and buy a house already! :)
Well, the #1 thing you can do is find them a house they HAVE TO HAVE. But other than that.... is there any real way to motivate them? Well, I pulled out the calculator... because money is a motivator. And here's what I came up with. Feel free to share this with your database.
Pretty much everyone out there agrees: interest rates are on the rise and will continue their upward trend. Home prices are also increasing. But is it REALLY worth buying now versus waiting until spring? It's busy... and it's COLD for Pete's sake! But waiting could end up costing you a mint in the long run, even if the differences seem negligable at first glance.
Let's say you find a home for $400K now at a rate of 4.125%, and let's say that same home would end up costing $420K at 4.375% in the spring. That's a pretty darn realistic expectation.
It doesn't sound like much.... BUT... with 20% down that is a jump of $177 in the monthly payment. That's a difference of $63,720 over the life of the loan! Plus you would need to come up with an additional $4,000 to put 20% down.
But let's say rates only go up 1/8% and prices don't move... That's still $8,600 over the life of the loan, and anyone out there will tell you to expect AT LEAST that.
If you just can't find that perfect house... who's to say you will find it next spring when buyers are out in droves and you're competing with other offers at every turn? And even if you did.... would it really be worth another $70K? If you are willing to pay that much more to wait, you may as well increase your price range $60K- $70K now and open up TONS more options.
What? Is that right? Yep... get out your calculator.
Just food for thought. Plus if you can find something and close before the end of the year, those extra tax deductions might come in handy for 2014.
If you need to refinance, HURRY UP! Chances are that things won't look any better down the road.
Most people don't realize how much waiting can truly cost, and I hope this helps you put it into perspective. Let me know if you need anything. And have a wonderful Thanksgiving holiday!
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