Thinking outside the Box for Buyers and Sellers

It's possible that I'm currently working with more Buyer Clients than I ever have within the past 5 years; while one of the reasons for that may be that my client and referral base continues to grow rapidly, I beleive the major reason this Stack of Buyer Client Files is soo big is because buyers are simply taking a very long time to decide to make an offer, my stack is just growing faster than my clients are purchasing.

What's the Hold-Up? Rates are Incredible, Market Compression has made some VERY nice homes now also AFFORDABLE and there is an impending risk of rates rising substantially...6, 7, 8% over the next few years.

Having observed and listened to my clients, it appears to me that most are really just feeling very uncertain of the future economy, their own job security and whether or not if they wait just a bit longer that prices will drop further.

I don't have a crystal ball, but I do know that if buyers are waiting for the market to hit the bottom, they'll only realize it's hit the bottom after they've missed it.

I spent much of the day yesterday thinking of ways that I can help both my Buyers and Sellers who are struggling in this market; here are a couple ideas.

For Buyers: Let's consider making an offer that gets you a Ridiculously Low Rate! It's similar to asking for the seller to pay for your closing costs, which is very common right now for most sellers to pay; this helps the buyer keep more of their savings on hand for unexpected repairs, home furnishings...blinds, you name it! I know many of you think buyers should have "More Skin in the Game", but let's face it, coming up with 7% of a purchase price for down payment and closing costs is not chump change with todays home prices.

So here's what I propose, let's make offers that request a Seller to purchase a 3/1 Rate Buy Down...it would be just like asking them to pay for your closing costs, except with today's current rates, it would substantially reduce your Rate and Monthly Payment over the 1st THREE YEARS of your 30 year fixed mortage.

Here's an example of what a 3/1 buy-down would do for a home purchase of $200,000 with a 3.5% down payment, assuming the current rate is a 4.75%.

This would cost a Seller Approximately $8,500...and likely worth it to get their home sold amongst a lot of competition.

1st year Rate: 1.75%, payment would be $598.56 plus Taxes and Ins.
2nd year Rate: 2.75%, payment would be $709.83 plus Taxes and Ins.
3rd year Rate: 3.75%, payment would be $826.95 plus Taxes and Ins.

Remaining 27 year Rate: 4.75%, payment would be $949.58 plus Taxes and Ins.

There's a chance we'd have to increase our offer price about $5,000 to get a seller to agree to this, but I bet there are a lot of sellers that would be more than willing to do this without having to increase our purchase price.

So worst case scenario, our purchase price is 5K more than maybe it could have been, which would mean your monthly payment is going to be a "whopping" $30 more a month, except your payment is cut nearly in half the first year and it allow you to comfortably grow into the payment over 3 years. I'm expect this would eliminate a lot of the fears of an uncertain economy.

More ideas for Sellers coming in my next blog.

Thanks for reading and following!