The ultra-conservative home buyer

Why being more aggressive could save you hundreds of thousands of dollars

Bottom line is that the most flexible and aggressive home buyers are getting the best deals! Everyone wants a great deal but finding them can be tough, or so you may think! In a market when prices and interest rates are going up, if you’re looking to buy a home, buying one sooner than later will result in the best deal for you in the long run.

This weekend I met a couple at my open house who started looking for a home just over 12 months ago. Their initial budget was $500,000, back when home prices were about 10% lower than they are now. In addition, rates were roughly 3.75% versus today’s rates at 4.75%. Now you don’t have to be a math major to know that the cost of owning now is much higher now than it would have been when this couple first started looking.

Over the last 12 months, they did what many buyers do who become desperate! They chase the market as it goes up…..the problem is they are always one step behind! After speaking with this couple for a few minutes I learned that they are now looking for a home up to $900,000! That is almost double, not even taking into consideration the 1% increase in rates.
I’ll tell you what I told them. If they would have started with their current budget of $900,000, they would have not only probably found a home priced lower than that (because prices were lower), but they would have been sipping egg nog by the Christmas tree with a 3.75% fixed interest rate for 30 years.

By no means am I telling you or anyone I come across to stretch themselves out of their comfort zone, but I am saying, take a close look at your finances and determine what makes the most sense for you and your family and go get it. Be aggressive, make smart decisions, and don’t be “ultra-conservative”. In my 8 years in this industry, I would say that 9 out of 10 ultra-conservative buyers will end up 3 ways; either settling on a home they are not happy with, so frustrated with the buying process that they buy a home out of their comfort zone, or worst case…….just giving up and renting.