It’s time to get potential home-owners to go ahead and buy in this so-called “buyer’s market”

While today’s market plays to their advantage, buyers, who should be swooping in to make the most of reduced housing costs and favorable interest rates, are sitting by, waiting.

It is up to you, as a competent and informed real estate agent, to mobilize your potential buyers to invest in home ownership now. When the market turns, today’s bargains will be yesterday’s missed opportunities.

While it is conceivable that home prices may drop further, it is likely that these decreased prices will be accompanied by increased financing costs due to rate cuts by the Fed. This means that any money saved on paying less for a house in a few months time will be offset by your client having to pay off their mortgage at a higher interest rate making “playing the waiting game” a waste of time (and very little fun).

This rate increase isn’t just speculation. Just a couple of weeks ago, in early February, the fixed mortgage rate jumped a full half-percent, making it the fastest rate increase in 20 years.

The table below demonstrates how even as home prices may drop, monthly mortgage payments basically stay the same; due to increased interest rates:

Scenario 1:
Prices decrease by 5% and interest rates increase by 0.5%

Scenario 2:
Prices decrease by 10% and interest rates increase by 1.0%

Today                          Scenario 1             Scenario 2

Home Price              Home Price: -5%           Home Price: -10%
$218, 900                 $207,955                      $197,010
 
Interest Rates        Interest Rates: +0.5%    Interest Rates: +1.0%
6.04%                     6.54%                         7.04%

Monthly Payment  Monthly Payment        Monthly Payment
$1,054                    $1,056                     $1,053

Table: Kadlec, Dan. “Ignore the Headlines!”  Time 25 February 2008

Why should your clients spend months in a situation that they want out of when they can begin their new lives in their new home today, with less interest?

READ ABOUT: The Millionaire Real Estate Agent Curriculum Path of The Mega Team

READ ABOUT: The Millionaire Real Estate Agent Curriculum Path of The Mega Agent

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This entry was posted on Monday, March 3rd, 2008 at 3:20 pm and is filed under **YOUR Real Estate Career @ Keller Williams Realty**, Keller Williams' NEWS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.