home buying tips
Are you concerned about handling a situation in which interest rates increase when building a home? If not, you should be. Depending on where you are building a home in Sacramento, it could take 4 to 6 months (or longer) to finish building your home. What happens if interest rates increase when building a home? You could get socked with a much higher interest rate. The rate could be so high that it could disqualify you from buying a home. Or, put a severe crunch on your financial cash flow.
Last September, interest rates remained around 3.75%. Today, interest rates hover at about 4.30%+. Fact, every 1% an interest rate rises loses a buyer about $25,000 of purchasing power. Some buyers do not understand the direct correlation between sales price purchasing power vs interest rates. However, you should keep interest rate fluctuation in mind when buying new construction. Also, think about how you’ve locked in the price of the home when you signed the purchase contract. Sales prices may go up but your pre-negotiated home price remains stable.
The way I see it, the problem with Sacramento home buyers who offer less than list price is it’s often a case of the blind leading the blind. I’m sorry, there is just no other way to say it. You’ve got buyers who have probably never bought a home in their lives trying to figure out how much to pay. And you’ve got a buyer’s agent who probably doesn’t sell very many homes. The agent most likely has had little, if any, training about appraising a home.
Often, these are buyers who offer less than list price because they saw an HGTV show. In those mythical fairy tales, buyers are always offering less than the amount the seller asks. Talk about overly generalized. We have a Sacramento sellers market, which means sellers can hold out for and will get list price. Very few homes for sale, high demand, hello?
When Sacramento home inspectors note petty items in reports, it is not their fault. The purpose of the inspection is thoroughness. They are also not trying to upset home sellers, but they often do. I don’t know why they can’t send home inspectors to an English class to learn ways to present findings in an easy-to-understand manner. Some just grunt and don’t write any words. They instead check boxes. The horrible boxes are always a scary red, too. Meant to instill fear in the heart of any buyer reading it.
It wasn’t that long ago, maybe 10 years back, an agent in my office asked why I would work with internet buyers in Sacramento real estate. This was an astounding concept in 2008. That a Sacramento Realtor could be found online by an internet buyer. Most of that search was organic because other agents were not online. They didn’t have websites nor blogs. Today, everybody has a Facebook, Instagram and Twitter account.
Fast forward 10 years later, and I still maintain a higher internet presence. The difference is many buyers today come from the long tail I’ve created online or from websites where buyers go. I stand out in the sea of ordinariness. That’s why internet buyers gravitate toward me. They see value. According to NAR, 66% of first-time home buyers are Millennials. Followed by Generation X at 26%. Buyers value experience.
Rarely does a buyer decide to revoke a cancellation when buying a home but it seems to happen enough lately. Makes me wonder if there is something in the water. One day the buyer is madly in love with the house; the next day, cold feet. They find some peculiar aspect of the situation to focus on, blow out of proportion, and the next thing you know, they execute a cancellation.
Always for silly insignificant things it seems. Then, for no known reason, they suddenly change their minds. Nope, they really DO want to buy the house, and they regret signing the cancellation. Fortunately, there are several ways to revoke a cancellation. The easiest solution is to sign an addendum agreeing to revoke the cancellation and pick up where the parties left off.