For Sellers
Let’s start with the sellers. Everyone is asking the same question: Is it still a seller’s market, and can I sell my home above the listing price?
For my local real estate market (Montgomery County, Maryland), the answer is yes. If you have completed the necessary repairs and renovations and present your property well, it can sell for top dollar due to the lack of inventory. There aren’t many options available, but buyers are still looking to purchase within different price ranges.
While high interest rates have pushed some people out of the market, there is still enough demand to balance the current inventory. I personally experienced a bidding war between buyers for a property listed at $650,000. It was located in a highly desirable area, well renovated, and ready to move in, and it ended up closing at $750,000.
Another aspect to consider is that sellers may be hesitant to make their next move due to high interest rates. As I always mention, focus on the monthly mortgage payment for your next house instead of the interest rate because most sellers in today’s market have significant equity in their homes to facilitate their next move.
For Buyers
Now, let’s talk about the buyers. As we all know, interest rates have dramatically increased in the last few years, pushing many buyers out of the market because they can’t afford the mortgage payments for the houses they would like to purchase. There isn’t much we can do about interest rates, but we can look at the best possible scenario in this situation and make the most rational and beneficial decision for us as buyers in this market.
Once again, focus on the monthly mortgage payment instead of the interest rate. As the saying goes, “Marry the house, date the rate.” You can always refinance later to get a better rate and reduce your monthly payment. This advice applies especially to first-time homebuyers. If you can afford the mortgage payment, don’t wait too long and jump into the market for your search. Owning is better than renting 99% of the time, with benefits such as building equity, appreciation, and tax benefits that you don’t have with renting. There are many great programs, such as down payment and closing cost assistance, available for first-time homebuyers that can provide significant benefits.
If you are not a first-time homebuyer, evaluate the best possible scenario for yourself based on your needs and calculate the equity in your current home. This will be one of the most powerful tools you can use in today’s market, whether you are downsizing or upgrading. Consider buying down the rate with points or opting for an adjustable-rate mortgage (ARM) if it suits your situation. When you find a property you like, act quickly because properties don’t stay on the market for long due to limited inventory.
Also, I would not recommend skipping inspection contingencies due to bidding wars unless it’s a very new or solid property. Skipping inspections can be more costly down the road than you think, and you don’t want to rush in and end up being upset at the end.
