Cost vs. Price

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Buyers are always focused on Price. What’s the price? How much can I negotiate? The market is going to fall another 2 %, 5%, 7%, 10%….. On and on and on…..No one wants to over pay.

Here is the truth. Focus on the cost to own. It’s like when you buy a car. You focus on repair costs, mpg, etc. Not sticker price alone.

IF PRICES FALL 10% and Interest rates rise only 1%, the buyers cost to own will be higher than right now!

Heed these words. You write the check. How big do you want it to be every month?

Funny item of the day: Bank Of America wouldn’t give my client a loan because of an appraisal. Client goes to another lender and gets the loan with a lower interest rate to boot. B of A buys loan.

Comments

  1. "IF PRICES FALL 10% and Interest rates rise only 1%, the buyers cost to own will be higher than right now!"

    I believe not true once you consider the tax break you get on the mortgage interest. You're paying 55 cents on every dollar for that. Plus your time value of money is greatly improved by paying with cheaper dollars down the road as opposed to higher down payments in more valuable dollars today.

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