When home buyers are timid about writing a stronger offer, it's almost always about price. But should you walk away? Take another look. This time, look at the total cash outlay to get in contract. Then look at your monthly payment (principal, interest, taxes and insurance). How much of a difference is it to write a higher offer to buy that house? I use a calculator to give quick estimates of the differences. It can be quite an eye opener. For this example, consider a 30-year mortgage at 4.5%, with 10% downpayment.
10% down payment
Fixed/pre-pay closing costs
Total cash outlay
PITI (principal, interest, taxes and insurance)
Interest rates are still considerably low, relatively speaking. Homebuyers, take note:
Primary Mortgage Market Survey Archives --- 30 year fixed interest rates.
January 2003, interest rate was 5.97%
January 1993, interest rate was 7.99%.
January 1983, interest rate was 13.25%
January 1973, interest rate was 7.44%Â
Homebuyers: you can write a winning offer in a highly competitive situation. There are all kinds of blogs and other information on this subject. But when it comes to price, at least you have another tool to help you make a decision.
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- How to stand out among multiple offers --- write a personal letter
- How can a buyer with an FHA offer get his offer accepted?
- How can a buyer write a strong and competitive offer on a short sale?
- Sloppy offer, sloppy agent...why this hurts the buyer