We get it; as soon as the market starts to go crazy, we see record-breaking home prices plus lower than low-interest rates, and some of us start to wonder, “Is the market going to crash? Maybe I should just wait for the market to slow down so I don’t waste my money!” While it is natural to think (or hope) this way, history proves those theories wrong (at least in Nova Scotia, Canada)
Here are four reasons why you shouldn't wait to buy:
1. Getting Priced Out: Let’s say you were pre-approved last year for $300,000. The market just started going crazy and houses that were listed at $260,000 were selling for close to $300,000. You may have thought that you would be overpaying if you went that high over the list, so you decided to wait. Now, since your job hasn’t changed and your pre-approval is still $300,000, the market appreciation has essentially priced you out of this market. Fewer homes are being listed in your price range and the house that sold for $300,000 last year might sell for $315,000 this year.
2. The Market Catches Up: If you buy a house for $30,000 over the list price and go to sell it tomorrow, you might not make any money on it. You might even lose money after closing costs, legal fees, etc., but that doesn’t mean you overpaid. If you are buying a house to live in for at least 3-5+ years which is most typical, the market will catch up and you will make money once you go to sell again.
3. Losing Out on Equity: While you are waiting on the market to crash, your home could have already increased its value by thousands of dollars.
4. Pay A Premium for The Right Home: If you find the right house and must spend over asking, consider it paying a premium now that will pay off in dividends later. If there are still improvements you can make to increase the value even further; you are in a great position.
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Every serious buyer wants to find the next best deal—that new property on the market that no one else knows about. After all, the quicker you know about a listing, the quicker you can view, decide, and potentially put in an offer.