It's a BUYER'S MARKET

In every market there are winners and losers. We are currently in a buyer’s market so as a BUYER or a SELLER… how should you be thinking?

Let’s dive in into both cases.

BUYERS:

Interest rates are high and therefore a loan is more expensive. This means your buying power is lower (you can afford less) and nothing about that feels good.

BUT you have to remember that interest rates are temporary. The plan is and will always be to refinance your mortgage when the rates drop. 

Here’s the shift in mindset you need: without a mortgage you are not in a position to refinance when the times comes. You have to be in the market in order to capitalize when the rates drop.

HISTORY LESSON: During COVID, we saw historic low interest rates and depending on whether or not you owned a home you experienced two different realities.

1. If you owned a home, those who bought when interest rates were higher, you were able to quickly and easily refinance to get a 3% or lower interest rate 🤯 

2. If you didn’t own and tried to buy during this time, you faced crazy competition and bidding wars with several deals going $100,000 over asking price 🤑 

TAKEAWAY: if you can buy now, do it. “Time in the market is better than timing the market.” Get in, avoid the competition, and set yourself up to refinance when the time is right!

SELLERS:

If you sold today, you wouldn’t be getting top dollar. Before jumping to sell, consider this…

What if you could keep your home, rent it out,
and buy the new home you have your eyes set on?

It sounds crazy because we’ve always been told we have to sell and roll over the equity in order to buy a new home.

But that’s not true. Everyone’s situation is different, but here’s what you should be thinking about…

If you’ve owned your home for at least 5-6 years you should have a low interest rate and equity in your home. IF THAT’S TRUE, then…

1. You can tap into that equity with a home equity line of credit (HELOC) to purchase your new home.

2. Keep your low interest which maximizes the investing principle of leveraging “other’s people’s money” aka the bank (talked about this in yesterdays reel).

3. Have an appreciating asset with tax benefits and someone else paying down your mortgage

AND if you still want to sell, that’s ok. I’m not against selling, I just want you to be aware of all your options, and then make the best decision for you and your family.

Because renting your home now before selling, gives you time for the market conditions to shift in your favor.

Imagine interest rates drop, competition increases, and now your home value goes up $50,000 because you waited a year or two? Would that be worth it?

If you’ve lived in your house for the last 5 years you have 3 years to rent it and sell it before having to worry about capital gains tax.

TAKEAWAY: There’s no right answer. Everyone’s situation is different. Everyone has different goals. I just want you to know you have other options because I want you to get the most out of your home investment.

That’s it for this week. If you found this content valuable would you please share it with a friend or family member (or both). Bonus points if you post about it on your social media.

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Thank you in advance and thank you for taking time out of your week to read the BUY RENT BUY newsletter.

Until next time 👋