If you are contemplating buying a home, here are a few good reasons why it’s a great time to do so. So many people have stopped shopping because interest rates have gone up. They have forgotten that historically the average interest rate on a mortgage is in the 9-percent range. So, an interest rate of 6ish is actually a very good rate.
I have a long-term real estate investor who told me he always buys when the interest rate is high. His thinking is he gets the property at a low price and when interest rates come back down, he refinances.
You can purchase your dream home at a more affordable price. The past few years, buyers were offering over asking price. They would ask if $20,000 over asking price is enough. These days there is room to negotiate your price. If you really love a home, it’s still best to offer full price. But if you are willing to risk losing the home to another buyer, you can hammer out a deal that works for you.
Plus, sellers are negotiating and working with the buyers. In a hot market, the sellers become very uncooperative. They will not fix anything or provide a wood destroying pest clearance. In today’s market, the sellers may help pay closing close or make repairs on the buyers’ behalf. Which is exactly opposite of what they will do in a hot market.
Another important feature of a normal market is you have time to shop. During the busy market, buyers purchased homes that may not have been the best fit for them. There was so much pressure to decide before a home was sold that they bought homes they later regretted.
One of the best benefits of home ownership is the tax benefits. Homeowners get a big deduction on their income tax. In most cases, all the interest paid annually is tax deductible. Essentially, you are not paying any interest on the property because you get the deduction. In addition, property taxes are also tax deductible, that is up to $10,000. So, there is even more money deducted, reducing your federal tax burden, and that is not just for one year.
Lately I’ve had buyers tell me they are waiting for prices to come down before they purchase. This is a flawed plan because if you are paying rent, you are building your landlord’s equity, not yours. Plus, the landlord gets all the benefits of ownership. Most tenants are paying $24,000 a year; that could be put toward paying off their home, not the landlord’s.
I hope buyers find these useful as they ponder homeownership. Homeownership has many benefits and, best of all, you can paint the rooms any color you like. Not the whole house in tenant beige!
If you have a real estate question, I’d love to hear from you. Give me a call, I love to chat real estate. Rosemarie Labadie, Crestline Real Estate, CA DRE #01240715, (909) 338-9995