Interest rates went from 3% to 5% overnight and it sent a shockwave through the marketplace…right after the shockwave comes opportunity. Savvy real estate buyers are taking advantage of the current marketplace. And I’m going to tell you how they are doing it.
Most buyers right now are waiting for rates to settle or waiting for the rates to go back down. But they may never. A savvy buyer is going to hit the market when there’s less competition because more homes are going on the market and the higher interest rates have slowed the buyer activity.
That means that they’re going to avoid multiple offer situations. They may even get the home for less than the list price when they get it under the contract. They’re going to have a strategy to overcome interest rates.
Savvy home buyers will pay more per month, and pay the loan off faster.
They make bi-monthly payments. They’ll actually make two payments a month on their mortgage. That simple little trick will lower their 30-year mortgage down to 23 years!
The other thing they’re going to do is they’re going to make extra principal payments. This will lower the loan amount so they’re not paying interest over the entire life of the loan.
Two types of people are going to really take advantage of the marketplace.
Anyone that’s looking to move up in the marketplace. People with average homes in high-demand markets like a 2 or 3 bedroom are selling their home for top dollar and then purchasing a bigger home in the $700,000 to 1 million dollar price range where they have the most buyer power. They get higher-end features, better location, a bigger lot, exactly what they want. And there’s less competition for those homes.
The other buyer taking advantage of the market is a buyer that owns a big home but is ready to downsize. They’re going to extract all that equity by selling their bigger home and paying cash for their next home. If you’re paying cash, interest rates don’t matter. Cash is King!
If you’re anywhere in between, you are going to have to get creative with your strategy. People that are looking to move up and the people who are looking to move down are really in a great position.
If you want to know what your home’s worth and what are the best options for your situation, go to NickMcLeanRealEstate.com