By: Tim Matthews

With interest rates high, and home prices trending down, is now really a good time to buy a house? This is a popular question, and the answer for each person is going to be different. To really figure it out, it’s helpful to ask yourself a few questions, and then weigh the pros and cons of each. 

1. How long do you plan to stay in the home for? Markets go up and down, they are cyclical, but historically real estate prices recover and go up. You’ve probably heard the saying “time in the market is greater than timing the market.” If you are planning to be in the home for the long haul, then you are likely going to outlast the current market cycle. If you plan to sell in a year or two and exit the market completely, then you should think twice about buying a home. 

2. Why are you trying to buy a house? There are a lot of good reasons to buy a home. Maybe you need more space for your family. Your current home is too small, it feels chaotic and is causing a lot of stress. Maybe you are paying a TON in rent and the mortgage payment would actually be very similar to your rent payments. Maybe you are living at home and are looking to buy your first home,  to give you some independence and space. Whatever the reason is, you have to decide if the benefits of buying a home outweigh the potential of the market dropping, or interest rates improving. Regardless of where you live, you will need to pay for a roof over your head. A primary residence should not be thought of as an investment, you are always going to be paying for housing so what makes the most sense for you? 

3. What would bother you more: If you bought a house and in two years from now it was worth less or if you did not buy a home, and in two years from now the value of the home was more? Remember that prices are often tied to what the interest rate is, so when rates go down, prices often increase and vice versa. Interest rates change, but what does not change is the price of the home you paid. Key considerations: 

Remember, real estate is a long term game and you win or lose when you exit the market altogether. What we mean by that is, even if you buy a house, and prices go down and you find yourself in a position where you need to get a bigger house, prices would have gone down on that home as well so you would sell at a lower price, and buy at a lower price. It is all relative.   It really only matters when you exit the market all together. 

If you are a first time home buyer consider buying a duplex and renting out the other part of the home. 

Prices have come down considerably and there are options on the market. Right now you can get a place with all the conditions you want, and in some cases 20% less than a year and a half ago. There is flexibility in the market today. 

At the end of the day it comes down to you and your level of confidence. If you plan to have to sell in 2 years, or it would really bother you if values came down, or you have a great rental price that is allowing you to save money and you have the space you need, maybe it does not make sense to buy right now? 

On the other hand, if you’re in it for the long haul and aren’t worried about prices and rates and you need a place to call home, it’s probably worth exploring taking advantage of the current market slow down. 

As always, consult with a professional in the business to help see what is right for you. 

Click here for steps on How to Buy a House. 

By: Tim Matthews

Are you thinking about transitioning from your current home to another? maybe the kids have moved out and you want to downsize, or maybe you've outgrown your current home and need something bigger, or maybe you just want a change. Whatever the case, it is important to be prepared and get an early start on things. We've put together a list of the 10 most important things you need to know when considering buying and selling real estate. 

1. Figure out what you really want in a home. Moving is expensive and a lot of work, you only want to do it if you really have to. Is there anything about your current space you could change, renovate, or add on to make it work? 

2. How much can you afford? This will probably depend largely on how much your house is worth, so sooner than later it is a good idea to have a realtor come out and provide you with a market assessment of your home. We can provide you with a complimentary home valuation, get in touch with us here. 

3. Choose a REALTOR®.  Start researching realtors and choose the one you’d like to have represent you. Your realtor will be an invaluable resource and be able to provide recommendations on what you need to do to get your home ready to sell, and give you referrals to various professionals you may need. 

4. Go to the bank, or mortgage broker. You want to know four things: 1) when does your current mortgage renew. 2) Will there be a buyout penalty for breaking your mortgage? 2) will the bank allow you to transfer your mortgage to the next home? 3) How much will the bank approve you for? This information combined with the value of your current home will provide you with the price range of the next home you wish to buy. 

5. Determine your needs and wants list.  Once you determine this, go online and look at homes for sale to see what meets your criteria and communicate this to your realtor so they can start looking for you as well. 

6. I’m ready to make the move, what's next? It’s a good idea to go out and start looking at some homes to get an idea of what you like, but you should also spend time making sure your home is ready for the market. When you buy your next home you will likely need a conditional of sale. To give yourself the best shot at getting your offer accepted, you want to make sure your home is ready for the market. We provide complimentary staging to all of our listings, and make sure our sellers are ready to go well in advance. At the end of this article you can request a copy of our sellers guide for tips on what to do to get your home ready for the market. 

7. Should I sell before I buy? It all depends on your risk tolerance. If you have a plan B in case you can’t find a place, it’s not a bad idea to sell first. The benefits to this strategy are: 1) You will know exactly how much money you will have to work with. 2) You won’t need a condition of sale in your offer, this will give you more leverage and help you get a better deal. If you don’t have a plan B, we can always try and get a long closing date to allow more time to find a place, but if you are very risk averse, you may want to find a home that will take a conditional offer upon you selling first. Both options are used frequently and there are pros and cons to each. 

8. What about closing dates? We can generally negotiate for closing dates to line up on the same day. If you want to move in first you can talk with your bank about bridge financing. What is bridge financing? read all about it here.

9. What costs should I be aware of? In addition to realty fees you will need to be aware of the following exenses. On your purchase you will have land transfer tax. There are many calculators you can look up to find roughly what it will be, but on a $600,000 purchase, this will be about $8500. You will have to pay legal fees on your purchase and the sale. Legal fees very depending on your sale and purchase price, contact a few lawyers in advance to get some quotes. You’ll need to budget for an appraisal, and possibly the cost of home inspections. 

10. Start the process early. Be proactive, a lot of people delay until the last minute leading to a stressful time. There is no harm in having the conversations now so you are ready when the time comes. 

Here are some FAQ: 

How much will I need for a down payment? You will need a minimum of 5%. 

Do I need to sell my house? This depends on a couple factors; but if you can afford to keep your current home and rent it out, this will allow you to have an investment property. Generally you'll need 20% down on your purchase and the rent your charge will have to cover the mortgage payment. Talk with a mortgage specialist. 

What is the average closing date? It can be anywhere from 30-90 days, but typically we find them to be about 45-60 days. 

How many homes do people see before buying a house? there are no set criteria but most people see about 8 homes before finding the right one. 

Download a copy of our FREE selling guide here