What a great time to be a buyer! If you are in the market for a new home, you could not have picked a better time. But, because it is a buyer's market, buyers are not asking the right questions. There is a lot of information out there that would be very beneficial to know, but builders/sellers are afraid to tell the buyers and the buyers simply aren't asking. Today we are going to go over 6 things that no one is telling the buyer that you really need to know.
1. Beware of the discount! Many builders and sellers are promoting huge discounts on their homes. Why are they doing this? Are they about to be foreclosed on? Have they already been foreclosed on? Is the builder about to go out of business? If you see a seller or builder that is marking huge dollar amounts off the price of the home, that should be a red flag to you, the buyer. Of course you want the best deal possible, but at least ask the following questions: What is the home actually worth? Did they mark the "original" price of the home up so they could slash it down and say they are offering a great discount? What will living in a neighborhood with de-valued homes do to the price of my home when I try to sell it in a few years? What kind of financing am I going to get? What will my monthly mortgage payment be? Don't just look for the home with the biggest discount. Ask these very important questions. You'll be surprised at some of the things you discover.
2. Here comes inflation! Whether you agree with the stimulus package or not, it has been passed and we will be affected by it. Every time in our country's past when government spending has been dramatically increased, inflation soon follows. Now is no different. In the next couple of years we are going to see a great deal of inflation. What does this mean to the buyer? You better buy your home before the inflation hits home prices. Don't wait. You will miss your chance to get truly rock-bottom prices. The mainstream line of thinking out there now is that the buyers should wait until prices go down more and the economy hits rock bottom. But, no one is talking about inflation and its effect on the prices of homes. Be smart. Look out for inflation. Also, don't forget that people who own a home once inflation hits will see the selling price of their home increase as well. Be one of the smart buyers who are in a new home when inflation hits. You will reap the benefits of it later.
3. Interest rates are going up! Several years ago, Milton Friedman said that interest rates will NEVER go below 10% again. Boy was he wrong. Interest rates are ridiculously low right now and we will not see them this low again for a while. Striking while the iron is hot will save today's buyers thousands of dollars over tomorrow's buyers. Hurry up and lock in your low rate as soon as possible.
4. Homes qualify you for tax deductions galore! As you are doing your tax returns, please don't forget about all the tax deductions that are available to homeowners. Here is a link to some of them, but find out everything you can on this topic. You could find yourself saving a lot of cash just because you own a home. Also, new, energy-efficient homes qualify you for even more tax deductions, so be on the lookout for new "green" homes.
5. The price of the home is not the most important number to look at when buying a home! The monthly payment is. How much will this home cost you to live in it each month? This number includes interest rates, utility costs, taxes, tax deductions, HOA fees, etc. Look at the whole picture. When looking at new homes, don't ask the seller "What are you selling this home for?" but rather ask the seller "How much does this home cost to live in each month?" This will give you a much more accurate picture of the home and tell you what you can and can't afford. Don't get caught up in their "sale prices". Talk to them about living expenses. A home is an investment and should be treated as such.
6. Say goodbye to the capital gains tax relief! Pres. Obama's administration has promised to get rid of the capital gains tax credit. What does this mean? Well, right now if you sell your home and make a profit, that profit is TAX FREE up to $500,000 for couples filing jointly! Once that policy is overturned, that profit is taxable and the figure appears to be in the 25% range. That means that if you wait to sell your home until AFTER the tax relief expires, the government could be taking up to $125,000 that could have been in your pocket. The capital gains tax will come back. It will affect you when you sell your home. If you are thinking of selling your home and upgrading or downsizing, now is the time. Keep your money before Uncle Sam takes it.
I hope this has been helpful. Again, not all this information is pertinent to everyone in the country, but if you are buying a home right now, this is good information to have, and no one is telling you. If you have any questions, please let us know.
This Happy News Brought To You By:
Newport Homebuilders
www.newporthomebuilders.com
469.854.6640
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