3 Reasons to Buy a Home in 2023

01. Evening out home prices – It is predicted that home prices will continue to even out as interest rates fluctuate over 2023. This means you could purchase a home now, and refinance in a year if rates go down.

02. Switch to a buyers market – The Zillow Home Price Expectations Survey show that higher mortgage rates may impact demand enough to reduce the amount of competition between homebuyer in 2023, giving buyers more leverage than sellers.

Does buying a home in 2023 make sense for you?

03. Long-Term ROI – In 2000, average US home value was $126,000 – a 106% increase in two decades. If your personal goals are centered around creating roots in a community, building long term return on investment, or creating/growing your family (whatever that may look like), there is no time like the present!

Interested in starting your home buying journey with a Sage & Cedar agent? Click here to schedule a meeting to talk about the process, lenders, the current market, and answer any questions you may have! We look forward to hearing from you!

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Because home buyers are agreeing to pay more than the list price, what happens if the appraisal does not support the contract price? Let’s dig in…⁠⁠

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01. You can ask that the seller negotiate down to the appraised value: The buyer can always request that the seller negotiate down to the appraised value. If they do not have the funds to cover the difference, this may be the only option!
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02. You can agree to pay the difference between the appraised value and contract price at closing: This would be an additional out of pocket cost. Ex- Under contract at $350,000, home appraised at $340,000, $10,000 add’l out of pocket at closing.
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The buyer can always request that the seller negotiate down to the appraised value.

03. You can meet the seller halfway and ask them to come down but also pay the difference out of pocket at closing⁠⁠: This is a meet in the middle scenario where the seller comes down on price and the buyer still agrees to pay that lesser difference.
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04. You can terminate the contract and walk away from the deal: Depending on the language agreed to in the contract would determine who would keep the earnest money.⁠⁠

Deciding what to do if your home appraises for less than contract price should always involve a conversation with your agent and lender. They may have a creative way to move forward and keep everyone on track! Looking to get started with an S&C agent? Contact us here!

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Here are 3 of the most common contract contingencies that you may run into during the buying and/or selling of your home:

01. Inspection– Due diligence is the first hurdle in a contract. It’s usually the first few days where is buyer does their inspection and negotiate repairs.

What this means for the Buyer: Buyers have an agreed upon period of time to inspect, request repairs, and negotiate with the seller. If the seller refuses to make repairs and the buyers do not feel comfortable moving forward without them, they may terminate the contract and, in most cases, keep your earnest money. 

What this means for the Seller: Buyers have the right to access and inspect your home during this period. If the buyer requests repairs you can agree to do all, some, or none of those repairs. If the two parties can not come to an agreement on those repairs, Buyer can terminate the contract and, in most cases, take their earnest money.

02. Appraisal– Once you’re past your due diligence period an appraisal will be scheduled by your lender. If the value comes back under contract price you have the chance to negotiate down to the appraised value or terminate with no penalty.

What this means for the Buyer: The appraised value is the most the lender can finance the home for. If it comes in under the contract price, buyer can ask the seller to lower the price. If they say no, you can pay the difference at closing or walk away with your earnest money. 

What this means for the Seller: If the appraisal comes in under the contract price and the buyer is not willing to pay the difference at closing, you may find your home back on the market. Decide if reducing that sales price makes more sense than trying to find a new buyer that may have the same issue.

03. Financing– This is usually the last hurdle in a real estate transaction. This clause indicates that the sale is contingent on the buyer obtaining financing. If the buyer can not obtain financing, they will receive a loan denial letter from their lender, and may terminate the contract.

What this means for the Buyer: This contingency protects the buyer while they are in the process of trying to obtain their loan. If they do not have a pre approval, or their financial situation changes, their earnest money will still be protected if this contingency is still in place.

What this means for the Seller: It could take the Buyer weeks to obtain final financing approval. While this is happening, the seller agrees to take the home off the market. If they can not obtain financing, your home will return to market. It’s a smart idea to ask the Buyer to provide a pre approval letter before going binding on a contract.

Deciding what contingencies to include or not include in your purchase contract is a big call. Talk to your real estate agent about what makes since for you as a Buyer or as a Seller. Interested in learning more about the home buying process? Schedule a Buyer Meeting here! Or start your online home search here! 

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