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“One of these days, you are going to wish you paid more attention to me. Sincerely, Terms & Conditions”  someecards

Real estate sales are still running hot in May of 2021, pushing the national median home price to $372,400, up over 16%  from $310,100 a year ago.  Low inventory of homes for sale continues to cause buyers to compete with other buyers for the same house.  Buyers have to think fast and make their highest and best offer. The saying goes, “if you have to sleep on it, someone else will be sleeping in it.”

On one end of the see-saw, you see rising home prices. On the other end of the see-saw are low mortgage rates and high wages attempting to keep everything balanced. New homes hitting the market help maintain a balance between homes for sale vs. high demand from homebuyers.  

Watch out for rising mortgage rates, though.  Rising mortgage rates along with higher home prices could cause a correction in the rate of increasing home prices, even though prices are expected to continue to rise over the next year or two. 

Other costly mistakes to avoid on the home purchase contract:

1. Carson and Casey thought they knew the neighborhood and made a competitive offer to pay $10,000 over the appraised value. They thought the house would appraise for $175,000, but it appraised for $225,000.  Oops!  The unexpected higher price took Carson and Casey way past their budget, and they did not have enough money to close without pulling money from a retirement account. Expensive!

2. Stay clear of clauses like, “seller to pay a $10,000 decorator allowance to buyer at closing.”  Traditional mortgages prohibit the buyer from getting cashback from the seller in this manner.  There are other solutions to appease both parties without giving cashback to the buyer.

Real estate and mortgage professionals bring value to home buyers and home sellers when they can apply their knowledge to avoid costly traps to these customers.   When you save a customer from a bad experience, they reward you richly with referrals for years to come. 

Posted On Monday, 31 May 2021 00:00 Written by

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