The Price Isn’t the Deal

It’s not the price you pay for your home that’s the deal. It’s bigger than that. Let me explain.

My goal in listening to and speaking with potential clients of Homebuyer Associates is to develop a plan. First, should you even buy a home? Where do you want to live? What monthly payment are you comfortable with that will still allow you to lead a normal life? How long do you think you will remain in the home? Do you want a home that requires cosmetic upgrades (for a lower price) or a home in near perfect condition? Do you understand the pre- and post-tax deduction cost of home ownership?

Most home buyers don’t have a plan, other than to start going to open houses. The real estate industry wants people to attend open houses without a plan because the industry knows most people buy on emotion. From the open house forward, decisions are often emotionally driven. I prefer our clients buy a home based on information. But you know that.

By not planning and not getting questions answered, I believe many potential first-time home buyers are missing out. They are missing out on the deal. They are missing out because they find it hard to take that first step – deciding to buy a home – or they find it difficult to make an offer to purchase once they have decided they want to buy a home. That caution is understandable but it would be a shame if they missed out on the deal.

If a home has a market value of $210,000 – $215,000 the deal isn’t whether you buy the home for $205,000 or even $210,000. The deal is that you buy a home – within market value – while prices and interest rates remain low.

Home prices will gradually rise (historically home prices have gone up in value in the 3.0 to 3.5% range) as will mortgage rates. I have no idea when either will occur. I do know that home prices are low and that rates are low – today.

So the real deal today in housing isn’t buying for “$10,000 less than asking price” or buying below the value of the market analysis. The real deal is buying – within market value – while home prices are low and mortgage rates are low and enjoying the long-term benefit of building equity. The deal is locking in on a purchase with a low-interest- rate mortgage.

To accomplish the above it is best you have a plan, have your questions answered and not be “sold.” If you, a friend or family member are thinking about buying a home, give some thought to having that cup of coffee with me. You might learn something. I might learn something.

Next up, a most powerful force.