At first glance it seems to be GREAT news for buyers. I would caution otherwise once you crunch the real numbers.
Many buyers sat on the bench in August of 2022 when rates spiked up from an abnormal low. AGAIN, memories are short in this business. Let’s remember what the market looked like for a buyer with low rates.
· Multiple offers within 1-2 DAYS
· SUBSTANTIALLY over ask competitive bidding
· CASH OUT OF POCKET to bridge the appraisal gaps
· WAIVED inspections
· Months of FREE occupancy to the sellers, hoping they don’t damage the house inadvertently.
All in the hopes that the homecoming queen would pick YOU to dance
I don’t know about you, but that wasn’t very fun from my end of the table. Nerve wracking. If a buyer chooses to buy TODAY, with higher rates and current conditions… What might it look like?
· MORE TIME to think about writing an offer. Take a breath.
· SLIGHTLY above asking price for a great house or even BELOW for average.
· KEEP YOUR CASH in your pocket. No need to automatically guarantee appraisal gaps
· Keep your inspection. You have the right to know the condition of the home you are buying.
At the end of the day, yes, your monthly payment will be higher. Guess what? You can refinance when those predictions of lower interest rates happen. Personally, swinging a bit of a higher payment for a few months as opposed to an extra $30,000 in cash at the closing table ,is more palatable to me.
The choice is yours.