I’ll give you one guess which situation the housing market is in right now.
People are greedy!
The market has been incredibly hot.
The median home price in the US has increased around 15% from this time last year. 15%!!!! In some markets, it’s way above this! Whoa!!
You’ve probably heard that many homes are selling far above the list price. And, often, there is a bidding war that decides who wins.
In our part of the country, I’ve heard of homebuilders having auctions to sell their new houses. And the highest bidder has to waive the appraisal contingency to win. In other words, the builder knows you are paying so much money, the bank will never appraise it for that price. So they make you waive the contingency so you don’t opt out when the appraisal comes in low. You have to come up with the difference in cash.
It’s a great time to be a seller and a tough time to be a buyer. The problem is: If you sell your home for way over market value, where are you going to go? You’ll probably end up paying way over market value on the next home you buy.
Don’t participate in the madness unless you absolutely have to. Buffet would say that now is the time to be fearful. Let this surge calm down. Let interest rates continue to rise. Let the supply catch up with the demand.
Having said all of this, let me give you an exception.
It’s always a great time to buy if you buy a property off-market at a discount that needs some work.
Buying off-market reduces or eliminates the competition and the high commissions for agents.
A house needing some work means the house won’t get top dollar & the seller will likely be motivated to give a discount.
Our flipping company is still regularly buying and reselling houses with no problem. That’s because we don’t buy on-market and almost all of the properties we buy are at a discount because of the work needed.
If you want to buy now, it’s best you avoid the feeding frenzy on the market. Otherwise, you may end up paying way too much for your next home.
Doing this would limit your ability to use your home to generate extra income for your ministry.
