Interest rates are on the rise. While they’re still historically low, they’re definitely higher than they were a year ago, which can be less than optimal for buyers. Many of the buyers we’re seeing in the market today are very cognizant of this shift.
Today’s buyers still have the same access to the upfront money for down payments and closing costs as buyers from the past couple of years. But buyers today are now realizing that their money won’t go as far due to rising interest rates.
This is one of the reasons why we are seeing demand start to shift. For example, if your house was listed on the market for the same amount today and this time last year, today’s buyer would end up paying more for the exact same house at the exact same price due to the higher interest rates. Right now, it’s those long-term financials that are the current issue for buyers.
Sellers may want to ask themselves what they can do to reduce the long-term effects of high interest rates for their buyers so they can attract the best buyers and get their homes sold quickly. As a result of the rising interest rates, some buyers can’t afford as much of a home because their monthly payments will be higher just due to interest.
You’ll also want to watch out for places where financing may fall through. Because interest rates are rising quickly, you may be in a situation where your buyer was pre-approved at a certain rate when making the offer, but interest rates rose in the interim, and now they can’t get approved for the same mortgage amount. This is an uncomfortable situation to be in for both the buyer and the seller.
If this happens, your seller’s agent will offer options that fit your specific situation. One option may be to buy points from the buyer’s mortgage rate or come to a new negotiated purchase price rather than having to go through the entire purchasing process again with a different buyer.
Your agent will guide you through every step of this process and market your home so you can attract the best buyers and sell your property for top dollar–even in a time of rising interest rates. If you want help getting your home sold quickly and for the best ROI, just reply to this blog or call me TODAY!
Karla Saa
CNE | Broker
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HomeTap.ca
RE/MAX Real Estate Centre Inc., Brokerage.
1140 Burnhamthorpe Road West
Suite 141
Mississauga, ON. L4C 4E9
D: 416-881-3770
karla@hometap.ca | www.hometap.ca
