Buying, Uncategorized

Are Higher Interest Rates Good For Buyers?

It may seem paradoxical but it may be true!

“Buy land, they’re not making it anymore”

Mark Twain
See how higher interest rates allow some buyers to buy that otherwise would not be able to when interest was low! Check out my PODCAST!

Some little known positives about higher interest rates!

  • Buyer’s have less competition to buy a home
  • Seller’s more likely to accept a contingency
  • Seller’s less likely to ask for an Appraisal Guarantee
  • Seller’s more likely to pay Closing Costs
  • Seller’s less likely to ask for Post Possession
  • Buyer’s have more homes to choose from

When Interest rates are low, everyone is buying, including cash buyer’s…why? Because they aren’t earning money keeping it in the bank, and the real estate prices are historically going up in a low interest rate market, so it’s a win-win for cash buyers to buy. This trend reverses itself when real estate prices go down substantially, and then those investor’s with cash start buying again when the sentiment is that the real estate market has hit a bottom. Investor’s tend to stay out when the market is stable and interest is high.

What it was really like when interest rates were low…

  • Seller’s receiving multiple offers on the first day!
  • Seller’s only taking offers for 24-48 hours and only if you saw the property!
  • Seller’s asking to stay in the property after closing for free for up to 6 months!
  • Buyer’s offering sometimes 25% or more over list price and then guaranteeing the Appraisal Gap before even knowing what it would appraise for…
  • Seller’s laughing at a contingency offer and then tossing it in the trash
  • Seller’s dictating everything from title company, buyer paying all closing costs (including those normally paid by seller’s), and when closing would be, denying homewarranties…
  • SELLER’S ARE IN CHARGE WHEN INTEREST RATES ARE LOW!

Here are some ideas on getting the Seller to help reduce your interest rate!!