Playing the Pricing Game

Which do you think matters more when waiting for the right time to buy a home? Is it securing a low purchase price, or locking in a great financing rate?

Most buyers become focused on purchase price when they’re considering whether or not to buy. The question you often hear is the same: “Has the market bottomed out yet?” The idea of getting “the best deal” on a home is paramount to these price shoppers, and indeed for cash buyers, this may be the primary concern.

While negotiating a great price is an important part of the equation, securing good financing terms matters just as much. One thing to keep in mind when waiting for the market to hit bottom is that interest rates can move while you wait, too.

Imagine, for example, you’re waiting for homes to drop an additional X% in value. While you’re waiting, mortgage rates rise Y%. Sure, you might secure the home at a better purchase price, but what you’ll pay over the life of the loan will be significantly higher than buying when the market was more expensive (but rates were lower).

Perhaps the most noticeable effect of a rate change is the net impact on your monthly payment. Even a small change in your mortgage rate can make a real difference in what you pay each month.

Buying a home is not like buying a nice coffee table. Price is not the sole concern. Given the complexities of price, property taxes, financing terms, and the larger tax implications of home ownership, it truly pays to consult with an agent who can help you weigh the pros and cons and decide what’s right for you.

Prices and rates both shift over time, and neither one tells the whole story on its own. If you’d like to talk through your numbers and options at your own pace, I’m happy to help and to connect you with local mortgage professionals. Reach out through reynoldsrealty.com or call/text me: Linda Reynolds 941-737-6562, Reynolds Realty Gulf Coast.