Custom Search
|
|
The Most Common Question In Real Estate
It's certainly the million dollar question-seriously. Wish I could answer, because I'd certainly get a million dollars. Think of the question every kid loves to ask-"Are we there yet?" Exactly like when we were kids, we still get the same answer-no. Are we there yet-no. Has the market hit bottom yet-no. Everyone is just waiting for that particular moment when the market hits that bottom point so they can finally buy into the Boise real estate market. It would definitely make me a millionaire if I had the answer to that question. I'd be able to answer the big question my wife always asks me, "When are we going to be rich?", if I could even capitalize on a tenth of one percent of the people waiting to buy when the market finals hits rock bottom. I've spoken to many people-the normal Joes to some very rich people-many are wanting to purchase Boise real estate for investing reasons or for their own businesses. Yep, lots of them are still waiting. Imagine these very typical examples that don't end up making much sense of those just waiting for the real estate market to hit the bottom. First is the person who has a house, but wants to move up to a nicer one. His house has lost so much equity he just can't take the step to sell at such low prices. So he's going to wait until he sees the market climbing up and then he will buy his nicer home. Maybe that sounds like great thinking? Of course he isn't realizing that the price of this upgraded home will go up once the price of the house he is starting to sell goes up. Maybe you plan to get in the height of the market to sell then rent until the market drops again to buy again-it's all a wash in the end. If you already have a house, you choice is to either buy low and sell low or buy high and sell high. So anyone waiting to upgrade have no benefit to waiting-but even worse, there will eventually be an increase in interest rates which is going to have the consequence of higher interest rates as a result of their "time the market" strategy. Next example would be the people "waiting on the sidelines" or the people who are waiting to buy for the first time. They observe that prices are dropping and think-I'll just be patient to buy while I wait for the prices to fall even lower. This thinking is at least more understandable than the first example but still the end result is likely to be tears. Did you realize that right now most people renting are dishing out more money their month to month rent than they would be dishing out if they just purchased the exact house? Seriously. The price of a home and interest rates have dropped so far that most of the month to month payments on Boise homes I have assisted buyers to purchase are 20% lower than the average rental prices. I need to add, the majority of people when they purchase an average starter home will save the amount of about $150 to $200 each month in taxes because of interest deductions. When you put these tax savings in mind, about 30% percent each month is being overpaid by you. Unless you foresee a move in the next three years and if you can qualify for a mortgage, you should probably buy now. At this point you are probably asking another question I get a lot "Are you done talking yet?" Almost. Here's my last tidbit on trying to time the real estate market. I've rarely met a homebuyer who considers the interest rate when he's considering whether a Boise home is "priced well." (Of course it doesn't have to be a Boise home to be a factor. I just think of Boise homes because that's where I do business. This applies wherever you are.) So here's an example. At 5% interest, over the course of a 30 year mortgage, a $100,000 home will actually cost you $193,000. That's bad enough. However, if mortgage rates go up just one point to 6%, that same $100,000 home will cost you $215,000. That's a difference of $22,000. Would you like to pay an extra 22% on your home? Of course you wouldn't. That's what you'll be doing if you wait until interest rates go up even just one point. Don't wait for rates to rise. I don't think home prices will drop enough to offset the interest rate expenses you'll pay. If you've made it this far, you are to be congratulated. I'm unsure if my own mother got to this point in her proofreading for me. The big message-if you want to buy a home, waiting isn't wise (certainly if you are a move-up buyer.) Remember those raising interest rates. Interest rates are a major factor just as much as the cost to purchase when you consider purchasing a home. It's not likely you'll ever get to choose your interest rates so don't waste your chances while these rates are so low. Article Directory: http://www.articledashboard.com Are you ready for your own house? Check out our review on how to buy Boise homes and for comprehensive information on how and where to find a reliable Boise real estate agent |
|