Ahhh, another snow day here in Basking Ridge. This time I am letting my kids sit in front of the television! I will be posting Basking Ridge sales activity shortly, but I also wanted to share some information that I received from my broker. One of the reasons I like working for Weichert, Realtors is that I feel that the management team does a great job of staying on top of the market – at a level one (or two) higher than I sometimes do. It is so important for your agent to be clued in to the LOCAL market and sometimes people forget to look at the bigger picture. Weichert makes it impossible for that to happen to me.
This news release was issued about a week ago. Buying a Home Offers Many Happy Returns:
Investors who are uneasy with the ups and downs of an unpredictable stock market might be interested in a more reliable, steady option. If history is any indicator, perhaps the best decision those investors can make at the moment would be to purchase a home.
Since the 1940s, home prices have risen an average of 4 percent a year. However, since most buyers only put down a small percentage of the home’s total cost, a buyer who pays 20 percent down still gets to enjoy all of the appreciation. That turns a 4 percent increase in home prices into a 20 percent yield on the money actually invested by the buyer.
“Today’s market gives individuals a chance to enjoy some of the lifestyle perks associated with owning real estate that they might not otherwise be able to afford. This might be the only time they can move to the more prestigious neighborhood, trade up to the larger home or get that cabin by the lake they always wanted,” said Jim Weichert.
Even with real estate’s proven track record of financial returns, perhaps the best reasons to buy now are the personal benefits associated with homeownership that you just can’t get from other investments.
“Many Americans successfully fund their retirement in large part through the equity they earned by owning a home over the years. Why not use that same investment practice for other purposes? Instead of buying mutual funds which are just paper until you cash them out, buy a vacation property that you can enjoy for 10 or 15 years and then sell when it comes time to finance your child’s education. Not only will you have a place to build great family memories, you’ll also see a healthy financial return,” added Weichert.
This press release supports and maybe illustrates my most recent negotiation. I negotiated a contract yesterday – the property was priced in the low $800,000’s and we offered a very strong bid in the high $700,000’s expecting to negotiate and hoping to end up with a price that would allow my clients to qualify for the tax credit which caps at properties priced over $800,000. The seller came back with a terrific counter offer but presented it as their bottom line which was higher than my clients had wanted to go. After much discussion among themselves, they told me that they decided to meet the counter. Their reasoning: “it doesn’t make sense for us to be stubborn about $8,000 or $10,000 when we are discussing a property that is going to be our home for many years to come.” Sometimes, it makes sense to look past the dollars and cents and realize that you are talking about your home. (Please don’t misunderstand, I am not advocating for spending more than you can afford or for spending more than a property is worth – this example assumes that we are working within the parameters set by your comfort level, your mortgage rep and the appraiser of the subject property.)
