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By now, you have most likely heard either in the news or from people you know that the interest rates have been raised by the Feds multiple times already this year. They actually just raised them again today (7/27/22). Because of this, some buyers feel like it may not be a good time to buy a home or upgrade to their next home. The higher interest rates may sound scary, but let’s break things down and explain why it may actually be a good time to buy.

 

There are multiple reasons why now may be a good time for you to buy. Some of the more obvious reasons are we are no longer seeing offers that are $50,000 or even $100,000 over list price. In fact, often we are only seeing one offer on a home or even no offers. This results in the home continuing to sit on the market for extended periods of time. Currently, many homes are selling at or even below list price; in fact, in the past 7 days, we’ve seen over 2,150 price reductions. In comparison, just a few months ago, we would have seen approximately 100 price reductions in this same 7-day period. Another reason to buy that you may have also heard about is that we now have more inventory in the Denver metro area, so buyers have more options when looking at homes.

 

There are also some other reasons to buy now that you may not have thought of. When we were getting offers extremely high over list price and so many offers on one property, many buyers accepted properties in as-is condition in order to be competitive. This was difficult for buyers because after already offering so much over the asking price, then, they also had to take on the expense of buying a new furnace, a new water heater or whatever was necessary. Another positive thing is that appraisal gaps are not very common right now.  Appraisal gaps were used when a buyer submitted an offer over asking, and it didn’t appraise at that value. This would guarantee that the buyer would pay all or some of the extra money they said they would pay over the asking price. We aren’t seeing that buyers need to bring all of this extra money to the closing table right now, which is great.

 

07-27-22_Could-Now-be-the-Time-to-Jump-in-the-Market-and-Buy_inset.jpgSellers are now also more willing to help buyers in order to get their homes sold. Some are offering seller concessions, which is money the sellers give to the buyer to help with repairs, closing costs or even money to use to pay down their interest rates. Another thing that sellers are becoming more accepting of are contingencies. Previously in our hot Denver metro market, if you had a house to sell, you probably couldn’t make your offer competitive. You had to be creative and find a way not to have a contingency. Some of those methods, like bridge loans or being able to carry two mortgages at once, were costly.  Sellers are also more likely to accept FHA and CHFA loans, where before they wanted conventional loans or cash. These loan programs can really help buyers with their down payments and/or closing costs.

 

At TK Homes, we watch the market very closely. We feel there could be many advantages to buying now, depending on your circumstances. The things that buyers have been waiting for have arrived. There are no more crazy extra amounts to bring to closing, and there is not as much competition. Buyers can have a regular inspection, which includes asking for things to be repaired and possibly even seller concessions to help buyers with closing costs, repairs or to buy down interest rates. Contact us at TK Homes today, and let us help you decide if now is the time to jump into the market and buy!

 

 


~ Written by TK Homes REALTOR®, Mary Smith
 

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