Welcome back to America’s #1 Daily Podcast, featuring America’s #1 Real Estate Coaches and Top EXP Realty Sponsors in the World, Tim and Julie Harris.
Agents and brokers, are you wondering how to speak to your buyer prospects? What about your listing prospects who are also buyers? Is it still a great time to buy a home? Stop avoiding the conversation because you’re freaked out about the shifting market.
It’s time to find the silver lining in this shifting market. Yes, it IS still a great time to buy a home, and here’s why:
14 Reasons Why It’s Still A Great Time To Buy A Home!
The question isn’t, “Is this a good time to buy a home?”, the question is, “Will tomorrow be a better time to buy a home?” Why or why not?
1-Interest rates are higher than in the pandemic years, but they are historically low. A global pandemic where the Fed throws money at the economy and simultaneously drives interest rates to the lowest ever recorded is NOT ‘normal’. Lock in your rate now and if it goes up, you’re locked in. If it goes down, you refinance. Date the rate, marry the home.
The average 30 Year Mortgage Rate in the United States averaged 7.74 percent from 1971 until 2023, reaching an all-time high of 18.63 percent in October of 1981 and a record low of 2.65 percent in January of 2021.
2-In today’s market, you may be able to negotiate with sellers who have been on the market more than 30 days., you might even be the only offer they’re considering, you can have the home inspected, possibly re-negotiate to handle any repairs, and maybe even pay less than 100% of the list price, and even get the seller to pay your closing costs. Additionally, you’ll actually have more than one home to choose from!
*Note: Do your homework on the listing before you make assumptions. There are still bidding wars out there, but there are also expired listings, longer days on the market listings, and sellers who are more motivated today than they were when they were freshly listed.
3-Inflation will cause home prices to continue to rise. Waiting means your purchase price will be higher and so will your down payment requirement since it’s based on a percentage of the purchase price. Your ratios could also be too high since the payment will be higher if you wait.
4-When you pay rent, you’re paying 100% interest, building zero equity and you have all of the risks.
5-When you pay rent, you’re not locked into anything for more than a year, two years if you’re lucky. The owner can sell the home, raise your rent payment or simply not renew your lease.
6-When you pay rent, you’re guaranteed to be paying more next year unless you want to move, assuming the owner still wants to lease to you. Don’t forget the cost of actually moving! You can’t just refinance or renegotiate your rent payment.
7-When you purchase a home, you’re securing an asset and releasing yourself from the liability of renting.
8-Owning real estate allows you to have more versatility of the asset. You can live in it, rent it, make it a vacation rental, refinance and pull equity from it, home office in it, or sell it.
9-If you can only afford to purchase a home at a lower mortgage interest rate, you still have options: -lower your purchase price, -change the type of mortgage you’re getting, -get gift money to make your down payment larger, -get the seller to pay for a rate buy-down and lock it in, or possibly decide to wait.
10-Bank overlays will get more stringent if the economy continues to decline. That means the requirements for financing will become more onerous, not less. (Bank Overlays) If you or your buyer(s) are deciding to wait, take the time to work on credit scores (Experian.com has great tools) and pay down debt (this will improve your ratios).
11-Compare your worst-case scenario, renting versus owning; let’s say you actually DO lose your job. Your lender will be easier to deal with than a landlord who may have their own issues and will simply evict you versus your lender who can put your loan into forbearance while you get back on your feet.
12-Most homeowners can temporarily pause or reduce their mortgage payments if they’re struggling financially. (Forbearance is when your mortgage servicer or lender allows you to pause or reduce your mortgage payments for a limited time while you build back your finances).
13-Owning a home (or several) is a forced savings account. Most people have their greatest store of wealth in the form of home equity. Over time, it is still the greatest investment you can make, with the most versatility.
NAR Chief Economist Lawrence Yun: “A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
14-There will not be a big housing crash! Supply and demand, demographics, forbearances for those who fall behind, super high equity and locked-in low-interest rates, and low inventory are all reasons you should not expect a precipitous drop in prices.
Knowledge equals power, ignorance equals fear. It’s our job to educate, motivate and get you into action. It’s YOUR job to educate, motivate and get your prospects into action.
Set a specific, 30-day goal for how many new, pre-qualified buyer and seller appointments you’ll secure. Get help from our Harris Certified Coaches by joining Premier Coaching for free. Visit PremierCoaching.com
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