3 Buyer Questions and Winning Answers to Move Them Off the Fence

Since I deal with homebuyers on a regular basis, I frequently hear the same three queries. Each person may frame them differently, but at core, they all are asking the same three questions.

Here are some suggestions on how to handle these questions to help your buyers address the real issue, “Is now a good time to buy for me?”

Question #1: I heard prices may continue to fall – why should I purchase a home now?

The answer: Price is not the only consideration.

Even though the market is going UP in many places, some are still worried about a potential collapse. Homebuyers worried about falling prices need to think about the total cost of their loan and the interest rates that drive them. Buyers who try to second-guess the market may end up paying much more over the long run.

For example, a buyer who purchases today for $375,000 with 20% down will have a mortgage of $300,000. If they lock in at a rate of 4% fixed for 30 years, monthly payments will be $1,432.25 and the total cost of the loan will be around $515,610.00. *

If the buyer holds off and prices drop five percent, he or she could save about $70 per month. However, if the prices drop five percent and interest rates climb just one percent, that waiting buyer will pay about $97 more each month and $35,168 more over the life of the loan.

I’ve seen so many buyers try to second-guess the market and fail. And there is always a price tag associated with that failure – sometimes a hefty one.

Tip: If you want to do this calculation for your buyers, you don’t have to be a loan expert. Download Trulia’s new free Mortgage App for the iPhone and iPads and check out the mortgage calculator.

Question #2: If I buy now, when can I expect to see appreciation?

The answer: Be brutally honest, no one really knows. Initial projections showed appreciation could start nationwide in 2014. Recently this date was pushed back to 2016 and anyone currently watching the market knows that in many places prices have actually started going up in the past few months. The problem is, we don’t know how long this growth will be sustained.

Historically, buyers didn’t purchase homes because of the potential for appreciation in value. Freedom from tyrannical landlords was at the top of the list.

Unfortunately, after the housing collapse that began mid-2006, the idea of appreciation is now firmly cemented into most homeowner’s minds.

Buyers whose primary goal is potential appreciation need to sit with you and write out a list of buying “Pros and Cons” to help make the decision – and, price appreciation shouldn’t be on the list.

Question #3: “Is it better to rent or buy?”

The answer: It totally depends on WHY you are buying.

If your buyers can make their projected mortgage payments and the monthly bottom-line is their focus, recent research shows it’s 45 percent cheaper to buy.

If you’re working with house hunters who are looking for short-term gains or quick profit, tell them they shouldn’t bother.

For buyers looking to be free of rental restrictions and petulant landlords, want the ability to renovate to their heart’s content, want to benefit from the significant income tax deductions and can afford the monthly payments, it’s a great time to buy.

Ultimately, the decision to buy is a big one and there’s no blanket answer for the house hunting masses. The best thing any agent can do is give their clients the truth and show them the decision to buy is (and has always been) personal.

Save yourself some time. Incorporate these suggestions into your responses when you’re first meeting to help your buyers make the hard call.

Consider Hiring a Handyman for Your Home

Perhaps you have some home projects you just can’t find the time (or inclination) to start. With the holidays coming up, it may make sense to hire a handyman for smaller tasks. Do you have someone you already use or are you stumped wondering where to turn? No matter the answer, these tips can help you find someone in no time!

Decide on Your Project - Smaller repair projects are perfect for a handyman. However if you want a remodel, plumbing, or electrical work done, it may be best to turn to a contractor licensed in that field of work.

Ask Around - Your neighbors and friends are great sources for referrals on home repairs. As a real estate agent, I also work with many contractors and handymen and can give you some ideas, too, on who to contact, depending on the scope of your project.

Determine the Cost - Find out how much the work will cost before it’s started. Sometimes services are billed hourly with you supplying materials, sometimes hourly plus parts, and oftentimes you can agree on a lump sum to make it easiest.

One Project at a Time - Your handyman may have many talents, but you’ll want to test his skills before laying out too many projects in the beginning. On the other hand, creating a a small package deal may work to your financial advantage. If he has good or great recommendations and provides financial incentive for a multi-layer job, it may be worth considering.

Hopefully these ideas will help you as you find ways to spruce up your home and glide easily into the holiday season. If you need suggestions on who to call for referrals or other home related needs, please keep me in mind.  You can always consider me your source for advice relating to your home and the local real estate market.

Home Buying Made Easier with Low Interest Rates

Today’s Primary Mortgage Market Survey® (PMMS) compiled by Freddie Mac showed a slight decrease or stay in mortgage rates. If you are in the market to buy a home, now is an excellent time to lock in a great rate for purchasing a home.

Continued low interest rates create more opportunities for home buyers who can qualify.

• A 30-year fixed-rate mortgage currently averages 3.55% (with an average 0.7 point) in comparison to last week’s 3.59% and the 4.12% fixed rate mortgage offered at this time last year.
• The 15-year fixed rate mortgage remained the same, at an average 2.86% (with 0.6 point), versus the 2011 15-year fixed rate of 3.33%.
• The 5-year Treasury-indexed hybrid adjustable-rate mortgage was down slightly, as well, averaging 2.75% (with 0.7 point) instead of last week’s 2.78% and last year’s 2.96%.
• The 1-year Treasury-indexed adjustable-rate mortgage dropped a bit, too, coming in at 2.61% (including an average 0.4 point), rather than 2.63% one week ago and the 2.84% seen in 2011.

Frank Nothaft, Freddie Mac Vice President and Chief Economist explained, “Mortgage rates were little changed over the holiday week amid mixed economic data releases. Although consumer spending rose 0.4% in July, representing the largest gain in five months, the core price index was unchanged suggesting little threat of inflation. Consumer confidence picked up slightly in August according to the University of Michigan, but remained below this year’s peak in May. And the manufacturing industry contracted for the third consecutive month in August.”

So, taking all that into consideration, now may be the perfect time for you to sell or buy a home. Call or email me to find out the latest news, get pre-approved, or find out about available homes for sale in our community. I’d love to help you with your real estate needs!