Sara Hamilton

The strange ups and downs that we experienced in the market in the last couple of years has left a lot of buyers confused about the value of homes and their tactics for offers.  It's still a great time to buy, but prices are on the rise and today's buyers need to be aware that tactics that may have worked at the beginning of the year just aren't getting results in the market today.  recently a few of my buyers have been caught up in multiple offer situations. sometimes they are winning, other times not. the winning buyers are recognizing that market price is set by what a buyer is willing to pay and a seller is willing to part with a home for. they accept the reality that if a home is in multiple offers, it will ultimately sell for market value, not under and have stepped up to the plate to pay the price. but there are still buyers out there who are losing out on homes because they have their hearts set on that "deal" that they could have gotten 6 months ago. In a downturn market, these are available and plentiful, but when houses are hot you must be realistic about the market value of a property and what your bottom line price is. don't just tell yourself that you are only willing to pay X for a property because that's the number you've decided. instead, you want to make an informed decision based on several factors:

1) what you can afford. i know this sounds simple, but i see a lot of disconnect between actual affordability and what a client has set their own personal bottom line at.

2) educate yourself on the comparable sales in the area. again, sounds simple, but the reality is that if a home sells for $400, the next comparable home will NOT come on the market for $395 and sell for $380k. the next comparable home will usually set their price point just slightly higher. and the next and the next and the next as the prices inch upward in this strong housing market.  This will happen until you've completely priced yourself out of the market. 

3) consider the future value of the home in relation to what it will cost you to buy it today. recently i did a worksheet for a client who is considering renting because she can't find what she wants for the price she wants to pay. we calculated that at the rate of price increases, that same home will actually cost her $8,000 more in 6 months AND she would have also lost that $8,000 gain she could have made in her own value if she purchased. that's a lost of $16,000 on a home under $250,000! The numbers are astounding.

4) consider what it is costing you to NOT buy.  most buyers out there today are first time buyers who are currently renting. the rental situation is comfortable and familiar, but a true drain on your financial future.  every time you pay rent, that money just evaporates. you're paying someone else's mortgage, not your own. when you own your own home, a portion of every payment goes into paying down the balance of your mortgage, and you're gaining equity in the process. it's like paying into your own pocket every month. this is money you're losing every month you pay rent. not to mention what you're NOT making on equity value gain in an upturning market.

The time to buy is TODAY because every day you wait means a higher price for the same home tomorrow, and a lost investment gain for you because it could have been you making that money on the increasing value of the home that you could have purchased.