Buy Now No Need To Wait Any Longer

Reblogger Pacita Dimacali
Real Estate Agent with Alain Pinel BRE 01367196

Tim illustrates that the effect of a 1% drop in interest rate is akin to home price dropping by 10%. That's got to make buyers sit up and take notice.

I also like how he presents the case to "Buy now, no need to wait any longer" which conveys the message a little more effectively than the ubiquitous "It's a good time to buy."

Go check out Tim's other blogs. There's always a thought-provoking blog there. 

Original content by Tim Lorenz BRE# 00919781

Buy Now No Need To Wait Any Longer


Every day we hear from potential buyers that they are waiting for the right time to buy their next home. Many buyers express the opinion that they believe sales prices may still come down further and are holding off from making an offer. Now, buyers are seeing with the recent drop in interest rates, there has been the same effect as a dramatic reduction in the sales price of the home they are considering to purchase. Those that understand the mathematics have started to take advantage of this recent windfall.

In the last 6 months interest rates for home loans have fallen over a full percentage point. This has the same effect as lowering the sales price of a home by 10%, based upon the monthly payment calculation. As an example, say a buyer wanted to buy a $500,000 home, has a 20% down payment and obtains a loan of $400,000. The monthly savings from the recent one-percent decrease in interest rates has the equivalent of the sales price being lowered by $50,000 (10%). 

A $400,000 loan at 5.25% has a monthly payment of $2,208. A $400,000 loan at 4.25% has a monthly payment of $1,967, a $241 monthly savings. Assume that interest rates did not come down but the sales price was lowered by $50,000 to $450,000. The buyer would still put a 20% down payment and obtain a new loan of $360,000. The monthly payment at 5.25% has a monthly payment of $1,987, almost identical to the higher loan amount at the now lower interest rate. 

There is one additional benefit of taking advantage of these lower interest rates. The one-percent savings of the interest rate allows a buyer to save $86,780 over the life of the loan in interest.  

If you know of any buyers waiting please make sure you help them understand that homes just went on sale and to not wait too long and miss out of this opportunity to save.  We would be glad to help any buyers who need more info just contact us.  Remember buy now there is no need to wait any longer to get your home.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"



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Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA


Thanks for reblogging Tim's post.  This information needs to be blogged and reblogged.  Hopefully, some buyers will see it and realize it really is a good time to buy.

Aug 24, 2011 07:54 PM #1
Carol Zingone
Berkshire Hathaway Home Services Florida Network Realty - Jacksonville Beach, FL
Global Realtor in Jax Beach, FL - ABR, CRS, CIPS

Pacita - thanks for the reblog; I didn't see this the first time around.

Aug 24, 2011 11:20 PM #2
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Pacita Dimacali

Alameda/Contra Costa Counties CA
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