(Not) For cash buyers only
Today, I would like to introduce Bill Kuhlman, CRS, who is the broker/owner of Kuhlman Residential Real Estate, in the Greater Boston area. He is the founder of TheCashBuyerNetwork.com.
Bill writes:
Though I might cover any question posed by a reader or some other topic of the day, my primary focus here will be issues of interest to cash buyers of real estate.The term cash buyer is anyone who plans to buy real estate without using a mortgage. The term can also apply to a buyer who plans on using a mortgage, but doesn’t plan on using a mortgage contingency with the purchase contract. (This carries significant financial risk, so do not do this unless you’re absolutely certain you can show up with the money to close.)
Help me help you. Before addressing the main topic for today, my question for anyone contemplating being a cash buyer is:
How can I help?
I want to know what you want to know. Your questions will drive my content on Boston.com each week, so feel free to ask any question you like. Other topics, not specific to cash buyers, are welcome, as well.One question I get all the time is, “Is this a good time for me to buy?” For most buyers, especially anyone planning on financing their purchase, my answer today is, “A lot depends on your personal circumstances, but if you’re in a relatively stable market, as in most communities in Eastern Massachusetts, and if you expect to be in your new home at least four years, this is probably a great time for you to buy a home.” This is especially true for first-time buyers and for trade-up buyers.
The secret formulas Even if your market is still moving downward at a modest pace, it’s still probably a good time for anyone using a mortgage, because of the relative effect price and interest rates have on monthly payments. If mortgage interest rates climb by just one percent over what you can get today, the price of your new home would have to decline by a full ten percent for you to save one penny on your monthly payment.I’m aware the Fed recently announced that it was going to keep its interest rates low for the next couple of years. But the Fed’s rates are only one factor in the Byzantine formula that determines mortgage interest rates on any given day. And I’ve learned over the years that mortgage rates tend to rise more suddenly than they fall.
Close enough
Even when someone is smart or lucky enough to have made a killing in the stock market, it’s highly unlikely they bought at the very bottom of the market and sold at the very top. Getting close enough on either end is what matters, and there are probably many more examples of people who regret not pulling the trigger near the bottom before it shot up, or selling near the top before it tumbled. The same is true in real estate, whether you hope to make a killing or just a moderate return.The answer for cash buyers is a little more complex, particularly if you’re buying in a declining market. More details in next week’s post.
For now, let me know what questions you have. If I don’t have the answers ready to go, I’ll find them for you.
