Do’s for Buyers
- Do get pre-approved for a mortgage. This will give you a clear understanding of how much you can afford to spend on a home, and it will make you a more attractive buyer to sellers.
- Do be prepared to be flexible with your offer. In a high interest rate market, sellers may be more willing to negotiate on price, closing costs, or other terms.
- Do consider an adjustable-rate mortgage (ARM). ARMs can offer a lower interest rate in the first few years of the loan, which can help you afford a more expensive home. However, be sure to understand the risks involved before you take out an ARM.
- Do focus on the long-term. While high interest rates will increase your monthly mortgage payment, they are not likely to stay high forever. If you can afford the home now, you will eventually benefit from lower interest rates when you refinance.
- Do look for homes that have been on the market for a while. Sellers who are motivated to sell may be more willing to negotiate on price.
Don’ts for Buyers
- Don’t wait for interest rates to drop. It is impossible to predict when interest rates will go down. If you find a home that you love and can afford, don’t wait in the hope of getting a better interest rate.
- Don’t stretch your budget too thin. High interest rates will already increase your monthly mortgage payment. Don’t make things even more difficult for yourself by stretching your budget too thin.
- Don’t waive contingencies. Contingencies are clauses in a purchase agreement that allow you to back out of the deal if certain conditions are not met. Don’t waive contingencies in a hot seller’s market, as this could leave you financially vulnerable.
- Don’t fall in love with a house before you can afford it. It is easy to get emotionally attached to a house, but don’t let your emotions cloud your judgment. Make sure you can comfortably afford the monthly mortgage payment before you make an offer.
- Don’t be afraid to walk away. If you don’t feel comfortable with the price or terms of a home, don’t be afraid to walk away. There will be other houses on the market.
Do’s for Sellers
- Do price your home realistically. In a high interest rate market, buyers may be more price sensitive. Price your home competitively to attract more buyers.
- Do make your home appealing to buyers. Stage your home to make it look its best and highlight its most attractive features.
- Do be flexible with your closing date. Some buyers may need more time to close on the sale of their current home. Be willing to work with buyers on the closing date.
- Do consider offering incentives to buyers. You may be able to sweeten the deal for buyers by offering to pay for some of the closing costs or by providing a home warranty.
- Do work with a real estate agent. A real estate agent can help you price your home correctly, market it to potential buyers, and negotiate the sale.
Don’ts for Sellers
- Don’t overprice your home. An overpriced home is unlikely to sell in a high interest rate market.
- Don’t refuse to negotiate. Be prepared to negotiate on price, closing costs, and other terms.
- Don’t take too long to respond to offers. In a competitive market, buyers may walk away if you take too long to respond to their offer.
- Don’t get discouraged if your home doesn’t sell right away. It may take longer to sell your home in a high interest rate market, but there are still buyers out there.
- Don’t try to sell your home yourself. Selling a home is a complex process. It is best to work with a real estate agent who can help you get the most out of your sale.
- This article is an opinion of the website holder, intended for informational purposes only.