Do Good Things come to those who Wait?

Posted by Help Now on Wednesday, June 17th, 2009 at 11:04am.

The Cost of Waiting for a lower Price

Utah was ranked 5th nationally for foreclosures last month. With so many foreclosures and short-sales on the market everyone is waiting to get a home at a low price. Sitting on the sidelines and waiting for prices to drop has its own costs. Purchasing a home is more complicated than simply finding the lowest price. Your monthly payment will be determined not only by the amount of money you borrow, but by the interest rate you borrow it at. The interest rate can easily counteract the benefit of waiting for a lower price. Interest rates are currently low, but how long does it take for that to change?

Negotiating for a deal on one of these properties can take a lot of time. When the perfectly priced home arrives on the market everyone who has been waiting pounces to claim it as their own. The result is a furry of offers and a bidding frenzy. This alone can increase the price above the original ‘perfect’ price. Additionally the negotiation process can take longer than usual. Short-sales can take approximately 120 days, which means after four months of waiting only one of the many offers will be accepted. Everyone else has to start over on a different house. During these months of waiting and bidding a lot can happen.

At the end of May interest rates increased anywhere from .50% to 1.0% in just 5 days! A home price would have to drop 10% to make up for this increase. Waiting for the low price can be costly! The current low interest rates are being artificially kept low by the Federal Reserve. This federal assistance is schedule to cease at the end of the year, which can potentially cause more dramatic increases in interest rates.

Waiting is a gamble. The Home Run Grant has already run out! The free $6,000 for home buyers was used by those who acted fast. Those who waited missed this opportunity.Don’t let another opportunity pass you by. The $8,000 tax credit is still available, but only to those who take possession of their home by December 1st. Other grants and free money are also time sensitive and time is running out.

Today there are great homes on the market at remarkably low prices and lower than average interest rates. The future situation is unknown: prices may go down, but interest rates will go up, and home prices can rise. Prices come down slowly like a parachute, but they go up like a rocket!

Don’t gamble with your home purchase. Opportunity is waning, don’t wait too long! Pick a realtor who knows the business, knows the market, and can get you into a home quickly while the buying is good.

About the Author:

Utah Dave - Neighborhood ExpertUtah Dave - Daybreak Neighboorhood Expert and Local Resident

My friends nicknamed me Utah Dave in high school because they said it didn't matter where we went in Utah, I would know how to get there and who we needed to talk to. The name sticks today as UtahDave has formed into a professional real estate network of Neighborhood Experts all across the state. I live in Daybreak with my wife and 4 amazing children. I enjoy dancing (which is how I met my wife Dawn) as well as traveling, coaching, and learning.

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