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It’s a good time to buy? It's a Buyers Market

Much has been said and written about the advantages that First Time Home Buyers have in this buyers market. Homes are selling at cheap prices, interest rates are near record lows and with the $8000.00 tax credit how much better could it get for the First Time Home Buyer. It can’t so if you are a First Time Home Buyer it’s time to buy!

But what about the Move Up Buyer?

Is this the time to move up to that home of your dreams?

Well there are very good reason you should consider moving up. Many of these reasons are the very same ones as for first time homebuyers. Low interest rate will benefit everyone but what about home prices. Well let’s take a look at a client we just helped move up.

Most move up buyers have a home they need to sell in order to move up to that dream house. We recently helped a family do just that, move up to their dream house.

They bought a home in 2006; they paid right around $240k for their old house. Well in today’s market we sold that same house for $229k. 240k – 229k = 11k loss on their old home. WOW that is a pretty big loss. Well just hold on because that is not the whole story.

Now for the good news.

We moved them into a much nicer home with lots more room, in an area of town that they have always wanted to live in. Their new home cost them $280k. In ‘06, the same house sold for 335k. 335 – 280 = 55K

Simple math shows that the $55k savings on the purchase more than makes up for the $11k loss on the sale. The family gained $44k in net worth. Now that is called working the market. Let the market give you what it has to offer and use the market to your advantage.

You see we’ve got to get over our obsession with the depreciation of our current houses. Yes, they’ve gone down in value. SO, HAVE ALL THE OTHER HOUSES IN TOWN! It may take a few years to recover from the loses of the past couple years, but you can trust that you are not the exception. Your purchase will be at a lower price too! One thing is for sure what goes down will always go up and when it does you will be sitting in a position to take full advantage of the new Sellers Market!

So you are thinking of moving up?

Whether you're moving to a larger, more luxurious home or a different neighborhood with better schools and better homes, there are a number of things you probably haven't had to think about since you purchased your current home. Below are some tips to get you started.

Make Your Wish List

Create a list of your needs and use it as a guide to selecting the right home. To start, some items to consider are:

• Current and future needs of your family
• Square footage and number of bedrooms and bathrooms
• Storage and cabinet space
• Entertainment space (patio, great room, kitchen, media room)
• Neighborhood amenities
• Proximity to quality schools, transportation, work, shopping and recreation

Your question might be, Can you be a move-up buyer in a buyer's market? If you have a home to sell to move up to that next level home, this may very well be the best time to do it. Your current home may have lost some value, but the "move up" home you have your eye on, which is larger and in a higher price range has lost value too, probably more.

So yes it is a great time to Move it on up!

Experts have some creative financing advice to help move-up buyers get the home they want, without relying on selling the home that they don't want. Homeowners who've experienced rising income since purchasing their first home may actually qualify to carry two mortgages at once. These borrowers should ask their lender for a pre-qualification letter. Such a letter should specifically state that the new home purchase isn't contingent upon the sale of the old home. Presenting this letter with your offer will likely generate a smile and a sigh of relief from the seller. Not to mention a much lower sale price on that new home you have always wanted.

Qualifying for two mortgages, however, isn't the same thing as making payments on two mortgages. To make things easier, you might consider additional equity financing or a refinance mortgage on the first home. A mortgage refinance will provide for a down payment on the second, and perhaps some extra cash to cover the bills temporarily. If you choose to tap into the equity on your first home with a line of credit, home equity loan, or refinance mortgage, do it before you list the property for sale. Lenders aren't interested in financing a home that's on the market.

Another option is a bridge loan, which provides short-term financing that's usually repaid by a certain date, or upon the occurrence of a specific event. In this case, that event would be the sale of your first home.

Talk with one of our partner lender before you start home shopping. If you have good credit, your lender will be motivated to help you develop a financing strategy to make your home purchase go as smoothly as possible.

If you are interested in looking in to your next move give us a call we would love to help you out.