Buying a home in this market can be tough, but if you’re willing to offer a little bit more upfront, you can see huge benefits in the long-term. Here’s why.
I’m not sure what it costs you to go out for a night on the town, but for me and my wife, a nice dinner will cost us somewhere between $70 and $80, possibly up to $150 if we have some drinks. At the end of the night, we’re always satisfied with our meal, but we’re also second-guessing ourselves, wondering if we should have just saved that money and used it for something else.
I’m not saying you shouldn’t ever go out and have fun, but more often than not, it’s shocking how many clients we have who qualify for a certain price point, find a property that’s below that point, and end up getting stuck on a number.
For example, let’s say a buyer is qualified for $800,000 and we find a perfect home for them for $775,000. In the kind of hot seller’s market we’re in right now, this home could very well have multiple offers and the price could get pushed up to $785,000. We have seen our clients miss out on this kind of property because they aren’t willing to pay the $10,000 to $15,000 over asking price that might be necessary.
We aren’t in the business of pushing people into making decisions that they’re not comfortable with. However, if you know that you qualify for $800,000 and are comfortable with those payments, it’s almost absurd not to make that offer of $780,000 or $785,000 to get the property that you love. In this current market, prices are going up and they’ll keep going up.
What does a night out have to do with it? Well, every $5,000 in your mortgage budget generally translates to $25 to $40 per month on your monthly payment. For an extra $10,000, it’s more like $50 to $80. If you’re willing to pass on the home of your dreams over $50 bucks a month, you may want to reevaluate your strategy. Right now, offering a little bit more than you’d ideally want to in this market ultimately means that you’re getting the home for less because the prices will continue to go up. Don’t get stuck on the price right now, focus on the big picture price.
If you have any questions for me in the meantime, don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.