What If I Wait Until Next Year to Buy a Home?We recently shared that national home prices have increased by 6.7% year-over-year. Over that same time period, interest rates have
6 Stellar Reasons To Buy A Home This Winter
by Joe Versage (Realtor)
The Kenney Team at Keller Williams
If you are like me and live on the east coast of the United States, you were probably affected by Winter Storm Jonas during the weekend of January 22-24. But if you're a potential homebuyer, I hope you used "cabin fever" as an excuse to get a jump on spring and the local real estate market.
In the DC metro area, smart homebuyers know that February marks the true start of spring home sales. And if they wait until ‘March Madness’, they may be late to the dance.
Here are 6 reasons to start the home buying process now, so you won't be forced to compete against those who wait until the cherry blossoms appear in mid-March.
1. Interest Rates Are Low - For Now: According to Realtor.com, home loan interest rates continue to be at historic lows, with "30-year fixed loans still hovering around 4%."But the interest rate to watch out for is the Federal one, which rose (by one quarter of a percent) on December 16th for the first time since 2006. Small increases like that typically have little effect on long-term borrowing like 30-year mortgages. But if several more hikes occur as expected, all bets are off. In other words, the earlier you lock into a fixed-rate mortgage loan, the better off you’ll be! To learn more about rate hikes and how they can impact you as a homebuyer, please click here.
2. Rental Payments Are Through The Roof: Number 2's title says it all. It's hard enough handing your hard-earned cash to a landlord, when you know you’re tossing out money from a window that could be equity in a home you own. But if you want to free yourself from the insanity, do it NOW, before your rent goes up again. According to Housing Wire, rents outpaced home values in 20 of the 35 largest U.S. housing markets last spring. Nearly 90% of property managers raised rent last year and 8% hikes in rental fees are predicted in 2016.
3. Beat Other Buyers To The Punch: Many homebuyers slack during the winter, due to adverse weather or because they think there's not enough inventory to look at. But homesellers love ‘ready buyers’ and may be willing to work out deals with those who show more incentive than others in the off-season. In a recent Realtor.com survey, "85 percent of buyers who plan to buy a home in the next year, say they’ll wait until spring or summer of 2016.” But they may be fooling themselves because homebuyers who hunt early have less competition and often see more properties with less hassle. As Zillow points out, there are also advantages to touring homes in the winter. "Seeing the house's features perform in the year's most potentially damaging conditions - heavier rains, freezing temperatures - can further convince the serious off-season buyer that the home is not a money pit."
4. More Time, Less Competition: Put a scarf around your neck and grab a cappuccino because this is YOUR time. And your time is money that can be well spent on those who are freed up to serve you. Independent real estate agents are busy year-round because they juggle multiple clients on both ends of home sales. But teams of Realtors, at a brokerage like Keller Williams, have the resources to dedicate more time to their clients. So if you're new to the home buying process, you won't be rushed into figuring things out on the fly. And your chances of closing with a better deal will increase because you'll be 'ahead of the game' and won't have to compete against multiple offers.
5. Mortgage Shop 'Till You Drop: When it comes to finding the best deal, consumers love comparing prices on everything from home cleaning products to automobiles. So why should it be any different, when you seek a 30-year home loan to pay for a house on a hill? Any educated homebuyer knows they should speak to at least three mortgage lenders and never accept the first rate-quote. It could turn out to be the best one they get, but they'll never know it, unless they shop around and talk to a few lenders.
FACT 1: Lower interest rates save homebuyers thousands over the course of their loans.
But tax breaks do too.
FACT 2: Pulling your credit or a home loan will do almost nothing to your credit score.
FACT 3: Secure a mortgage loan pre-approval letter before touring properties or you may miss out on the home of your dreams.
So start early, take your time and heed the advice of realtors, who often work closely with several lenders too. It's a referral business, after all, and that can be a win-win for homebuyers who do their due diligence.
6. Some Sellers May Need To Fly The Coup: Like birds that fly south for the winter, there are many reasons for a homeseller to "want to get away" before the cold weather snaps. In areas like Northern Virginia, many homeowners come and go at various times of the year, due to job transfers or military commitments. Investors are eager to flip real estate that they renovated over the summer and fall. And retirees may unload their homes, so they can flock to warmer states to buy new ones. The next time you speak with your Realtor, ask him or her if they keep up with financial news. Astute agents often find off-season deals by "watching for a rise of homeowners who gained or recouped equity in their homes. Numbers in the hundreds of thousands can indicate a pool of homesellers who were underwater---or on the cusp of being so---and who might now be interested in getting out from under their mortgages as soon as possible, regardless of the time of year."
(Last quote courtesy of: Zillow.com)
I grew up in Fairfax County and playing sports throughout the area. As an adult I have been running my own company for almost 10 years. I took a struggling franchise and grew it into the largest of i....