Wednesday, September 28, 2022 / by Ira Miskin
MARRY THE HOUSE AND DATE THE RATE!
Yes, it’s still not easy to find the perfect home because there is still a smaller than usual number of homes on the market for sale. Yes, interest rates have nearly doubled in the last 12 months making it more difficult to secure financing at the home purchase price you could have 12 months ago. Yes, prices and rates seem to change daily. No, there likely won’t be market balance for some time to come.
So, what’s a shopping homebuyer to do?
Marry the house and date the rate! Huh? Yes, marry the house and date the rate.
Unless the marketplace is manipulated as it was leading to the crash of 2008, which, given all the rules and regulations initiated after the crash is far less likely, the periodic changes in the national economy have little to do with buying and selling residential real estate. If personal needs and goals move you toward buying or selling or both, there is never a better time than now to get it done.
Oh, but if I wait until the market hits bottom, I can get a better price when I buy. Oh, what if I can’t find a home to buy and I sell my current home, where will we live then? Oh... oh... oh...! If you find a good excuse for waiting then that’s your excuse, not a plan.
A plan is knowing what the reason is for buying and for selling a home now. A plan is not getting sidetracked by rises and drops in interest rates, but determining first how to use the tax benefits from home ownership to offset the interest rate expense, and having a strategy for periodic refinancing to adjust your rate and your monthly payments. A plan is calculating the equity gained by owning the home vs. helping your landlord increase the equity in that rental you are helping pay for with no residual benefits and a rate rise likely at the lease renewal. A plan is using real estate as a growing asset vs. only having monthly expense liabilities.
When is the best time to buy or sell a home? When you are ready to or need to buy or sell a home. There is never the perfect time and that’s why successful real estate investors are always buying and selling. The home you own is the place where you live and should love it, but it is also an investment in today and in your future.
So, marry the house and date the rate!