Why Waiting To Buy A Home May Not Be The Best Strategy
Posted: Tuesday, May 15, 2007
by S Allen
EZhomebuyers
I recently got to sit in on a mastermind meeting with top experts in the
"While there are certainly pockets of the country where real estate can be said to be overvalued, in most areas of the country the average house is actually priced quite fairly." said CPA Dan Augustin. "That means that putting off the purchase of a home may simply mean throwing away more money in rent, and losing out on the significant tax benefits home ownership can bring."
Winning strategy: Don’t wait to buy a home- but buy a home and wait
Many people plan to save their money waiting for home prices to come down to a lower level, but this is generally not a winning strategy. While it is true that the housing market is cyclical in nature, housing prices seldom go down for very long, and there have been extended periods in which home prices did not retreat at all.
"Saving even small amounts of interest will compound to save buyers thousands over the course of their loan." EZ Homebuyers credit adviser Christine Fladhammer went on to say, "And with a rent-to-buy program those who would normally be renting can benefit from the power of what Benjamin Franklin called 'The 8th Wonder of The Word' - compound interest."
All agreed that the best strategy may be to simply bite the bullet now and buy a home whose payments you can afford. This will allow you to participate in, and benefit from, any future appreciation in home prices. You can also build credit and equity while you live in your new home.
Mike Adams from Coldwell jumped in, "Let's look at an example - using a home valued at $300,000 in today's market. In many areas of the country this would be the average home. If that home appreciated at a 5% rate over the next year, its value would rise by $15,000.
Few potential home buyers would be able to sock away enough in a savings account to offset that much of a gain. And that $15,000 figure does not include any potential tax savings the buyer could have gained through deducting mortgage interest."
Many potential home buyers have thought that rising interest rates would serve to cool off the hot housing market, but so far that has not happened. Even as short term interest rates have continued to rise, mortgage interest rates remain near their all time lows.
In addition, waiting for high interest rates to kill the housing market and lower prices will also mean that you will have to take out a mortgage at a higher interest rate, and that alone could negate any savings you achieve through a lower purchase price.
While it is true that there have been several instances of boom and bust real estate markets, this situation is not in place in most areas of the country. While there certainly are overheated housing markets out there, it is important to remember that real estate is not the same as the stock market.
There is a real intrinsic value to real estate, and a limited supply. That means that even if home values fall, they are unlikely to fall as significantly as stocks did in the last bear market. In order to trigger a significant decline in housing prices, there would need to be a significant negative event, and at the time no such event seems to be on the horizon.
Mortgage expert Terry Davis said, "There are plenty of anecdotal evidences that the housing market remains strong, and that it is likely to remain quite strong for some time to come. Even though many people think that the market for real estate may have peaked, there remain plenty of stories of homes that sold for more than their asking price, and bidding wars continue to break out at many open houses around the country".
In addition, there is little evidence to indicate that the prices of homes are likely to suffer a decline in the near future, and the number of homes that sell for less than their asking price is still very small. With all these indications of a still strong housing market, and still low interest rates on mortgage loans, it is easy to see why waiting to buy a home may not be the best strategy.
We are here to help if you’re serious about your future, contact us
Don't wait to buy real estate- Buy real estate and wait. (See Homes)
Have a Great Weekend!
Lisa
This informative interview brought to you by the Help Desk at EZhomebuyers
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Top-level comments on this article: (5 total)I have not wrote you a letter but want tthank you all for your help. When our banker said that we needed more time to build up credit we thought we were stuck renting for another year. When we looked for other ways of buying a house we found a lot of scammers out there. With only 1 week before we had to renew our lease a friend recommended your Web site. It was the best thing she could have done for us. We found a great house and with a little money down we were able to buy a beautiful home at a great price and in the neighborhood we wanted. We moved in SEVEN DAYS! AND both of our credit scores have shot up 40 points in ONE MONTH. WOW! You really made it possible (and your Credit Program is icing on the cake). Start to finish it’s been great. If I can ever be assistance let me know. Your services are highly recommended. Thank you VERY much, Tom and Sammy *BTW: Your invitation just went out for our official Open House Celebration!(many renters are hoping to meet you:)
From start to finish you have been helpful and professional. We can testify to your ability for over-the-top service to get the job done and will highly recommend your services. Thank you, again. Thank you VERY much, Joan
i had crappy credit an a divorce made me have to get a house and i hate renting so my mortgage lady said i had to talk to christine at ezhomebuyers.c om i used the ezhomebuyers program to get my house on a contract so my payments went to my house amount. and 2 years later my mortgage lady said it worked and i got my loan zero down and lowered my house payment $190 a month. so i say their program works for me and have onlt good things to say about the ehomebuyers company. blessing, malachi benedo
Thanks to you folks at EZhomebuyers we are now in our dream home and not renting. You deserve all the thanks( and separation from the crooked people in business). But ya, I was skeptical too. our banker said that we needed some time to build up our credit we thought we were stuck renting for another year….she recommended we call you because of your Credit Program. We found a great house and we were able to buy a beautiful home at a great price and in the neighborhood we wanted. We moved in SEVEN DAYS! They made the home buying process quick and easy. Let my wonderful story & great experience be shared with others as results-based evidence that from start to finish you have been helpful and professional. If anyone is considering a rent to own home in Ft Wayne I can testify to the EZhomebuyer Program. And over-the-top service to get the job done and will highly recommend your services. ABSOLUTE CHEERS FOR EZ and your crew!!! God Bless, Jani Fort Wayne, in ==================================================
thx for your help
thank you chrissy
for your help with the sale of our stellhorn rd home.
i will send a letter of recommendation when i get time.
god bless,
veronca taylor
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