colinrealestate

True story…
Paul wandered onto a car yard and was just casually looking around when a salesperson came up to him and said “Tell me”, if price wasn’t an issue, what you buy here?”
Paul glanced around spying
what looked to be a relatively new, red BMW Z4 and pointed to it saying, “The Beemer would be nice, I’ve wanted one of those for a long time.” The price on the window: $49,990.
“What do you drive now?” Paul told him, describing make, year and mileage. He stood silent in thought for about two minutes, clearly doing some calculations. He then looked up and said, “For your car plus $950 a month for 12 months you can drive the BMW home today.”
Paul was quite taken aback by this. He quickly calculated that the $950 was well within his ability to pay. “So what would you give me for my car?” “Does that matter?” came the reply. “Well, what interest do you charge on finance?” “Once again, does that matter? Would you be happy to see that showroom condition BMW in your driveway TODAY, for $950 a month?” Paul couldn’t argue with this logic. But, when he first walked onto the car yard, all he could see was a $50,000 car and imagined 30%+ interest payments on car yard finance.
What’s this got to do with buying a house? It’s the same process. It’s all too easy to be put off by the $500,000 price tag on a new house or the 7.5% mortgage rate. The real issue is neither of these. It’s the cost difference to change homes. If you could change to the home you really want for an extra $X per month – and you could comfortably pay the $X, what does the rest matter?
Our advice is that if part of your new home needs financing, talk to your bank or a competent mortgage broker and then talk to us. Work out the financial implications of changing homes. See what might be around that fits your requirements. Ask us to value your home. Remember that it’s only the difference that matters.

Filed under: REAL ESTATE | Tagged: Real Estate