Timing and Strategy: Mastering the Real Estate Game
Welcome back to Go Gaddis Real Estate Radio, right here on AM 920 The Answer. Thanks for sticking with us through the break. My name is Cleve Gaddis. You're listening to Go Gattis Real Estate Radio, where we help listeners go from real estate novices to experts, because we want home selling and buying.
For you to be done with total confidence and without all that worry that is so typical with life's biggest investments. And we want to connect with you and it is easy to connect with us. Go to gogaddisradio. com. G O G A D D I S radio. com. You can ask questions that we answer on air or off air. Sometimes people don't want people on the radio knowing their business and that's okay.
I'll be happy to answer questions off air. You can make comments on anything we've said. You can push back or challenge things that we've said. You can share your ideas with us. You can request your neighborhood be featured in our neighborhood spotlight section, where we do a three year analysis to help you understand the trends, what's going on in your neighborhood and the neighborhoods around you.
In some cases, And you can also subscribe to our podcast. We're available on every major podcasting platform, and we would love. for you to be a podcast subscriber. Is it more appropriate to take a short term view? We do our 7 day update, which would be a very short term view of the market. We do that in the first segment of the show every single week.
Or is it better to take a long term view of the market? Even in real estate, it really, really matters. There are some things in life that you need to take a short term view on. I don't think real estate is one of those. We received a question from Charles in Alpharetta. Says, we want to list our home and buy a new one, but wonder if there is such a thing as timing the market.
And I would say, yes, there is such a thing as timing the market, but the reality is, um, anytime I have tried to time the market, Now, it doesn't mean that you shouldn't try to make intelligent decisions. I've bought investment properties in Metro Atlanta since 1992. Never owned an investment property outside of Metro Atlanta.
I bought investment properties as recently as two years ago. I would love to buy another one this year if I could find one. But the reality is... I don't really try to time those purchases based on the market. I time those purchases based on my needs. My investment need. My personal housing needs. And I think that is so, so important.
I think there's a couple things to remember. And that is, you know, things fluctuate in the short term for sure. But most analysts don't really expect things to move. A lot. They don't expect the market to be very volatile. It's important to take that long term view. You know, homeowners create wealth in two ways and really buying a home is not all about creating wealth, but it's kind of turned into that over the last 30 years in the United States.
The first is when they buy the property. Uh, and, and, and then pay down the mortgage or, you know, the money they borrowed to purchase the home is second is by seeing an overall increase in the value of the home, which tends to happen over time. If you look at it and said, well, what is the historic appreciation of homes annually for the last 50 or 60 years?
It's been a little while since I've seen those numbers. But it's probably 5 percent or greater in annual appreciation every year. Certainly doesn't happen every year, but on average it's more than 5 percent every year. As long as you plan to live in your home for a while, it's really not worth trying to time the market.
Uh, I bought the most expensive townhome in the neighborhood where I live. But I can assure you... That in the next six months, it will not be the most expensive townhome. And then six months after that, it will be further away from the most expensive. And six months after that, it'll be further away from the most expensive.
And you could be thinking, well, Cleve, why would you have bought a townhome in a market that many. Home buyers and even home sellers don't consider to be a good market. And it's because it's what I needed to do for my life. I had lived in the same home for 23 years. Um, for most of you who listened to the show, you know that over the last three years or or three years ago, I got a divorce.
Um, I wanted to keep my home long enough for my daughters to be able to come home during the summers and. Um, for, uh, spring break and, and, and holiday seasons. And my youngest is a senior in college, which means she'll be off on her own. And, uh, the reality is it was time for me to sell it. So even if interest rates were a little bit higher and I thought I was going to pay more for something than I would have a year or two ago, it was the right thing for me to do, and I'll tell you, it's been one of the best things that I've done in a long time, because it's given me a whole renewed.
enthusiasm for life and, uh, and giving me a whole new set of routines and things like that. So I'm not saying if you're stuck in your old routine, you need to buy a new home. I'm just saying that's what it did for me. Long as you are planning to live in your home for a while, it's not worth trying to time the market.
As I've already mentioned, the smart move really is for buyers to purchase a home when they find one they love to live in. Uh, with a down payment, a monthly payment they can afford over the long term, it will be better for buyers to, you know, jump into real estate as soon as they can. There are, um, a couple of instances I can look back where I put off buying real estate and I wish I'd have gone ahead and just bought it because over time, real estate values increase and if you're looking at it thinking.
Well, I don't know, uh, if it makes sense to purchase it today's interest rates. Well, they're not going to stay this way forever. So if they drop down into the fives or the fours, you could refinance, just make sure you keep your income good and your credit nice and clean. And you can refinance really whenever you want to real estate is a market that 50 years.
to deliver increased home values and also advantageous tax benefits. For those of you who itemize your deductions, there may be temporary shifts or corrections in any market, but that doesn't mean that a larger economic force, uh, that larger economic force will be greatly altered. I want to Give a special kudos to John Birchfield, uh, who is, uh, my favorite and preferred lender with Capital City Home Loans right here in Metro Atlanta for helping me put together those tips to share with our, uh, listener who asked the question.
It was Charles N. Alpharetta. Um, anytime I've tried to try and time the market, anytime I have to tell myself a story to convince myself to do something like now's not the time or now is the time. If for you personally it's the time and you know it's the time, then I encourage you to move forward. Um, diligently toward looking for a new home.
And for those of you who live in a home already, and you're afraid to sell your home because you'll give up your 3 percent rate to exchange it for a 7 percent rate, I'm not saying you need to be okay with paying 7 percent interest, but I'm saying that's not the whole story. The reality is in many cases, you've accumulated so much additional equity in your home over the last few years.
That you could take a small portion of your equity, make it as a down payment, take a large portion of your equity and invest it in, uh, 12 month CD's, uh, certificates of deposit or 24 month. It doesn't make any sense to invest longer than 12 months right now, but you can get a 5 percent or 5. 2 or 5. 25 percent interest rate.
So in some cases, I know people who make enough money in interest off of the money they've put in an online high yield savings account or a certificate of deposit to make their entire. Not saying it's right for you, I'm just saying for those of you who feel stuck. Who feel like you can't move because your interest rate is too low.
That there might be other ways to work it out. And I think that is so important. Football season, as you know, is in full force. And I know selling a house isn't really the same thing as winning a football game, but it's similar to when somebody drops the ball. Are there ways to increase the odds of reaching the end zone in a transaction?
In other words, are there ways to increase the odds of someone not dropping the ball in a transaction? And the answer is yes. Now, I'm gonna say something that's gonna make me sound like I'm not a very nice person. And I want you to know that I'm not always this way, but when it comes to a real estate transaction, I am.
I don't believe anything anybody says. And I'm sorry to admit that on air right here in Metro Atlanta, but I don't believe what they say, but I do believe what they show me and what they do. So I learned a long time ago when I first got into real estate that if it looks like a duck, and it quacks like a duck, it's a duck.
And if it looks like it's not gonna close, And it quacks like it's not going to close. It's not going to close. And for, especially for new agents, and we actually have an agent question, uh, that actually generated this, and I'll go ahead and give it to you. It's from Alex in Duluth. It says, I'm a new real estate agent.
I was wondering if you can give me a few tips on how to not lose a deal. Are there preventable issues? And I will tell you that not all issues are preventable, but the reality is, All issues, if you're going to have them, you can move them sooner in the transaction so you don't get the day before closing and have a problem.
So let's just talk just quickly about a few things that you need to think about. One of the biggest things that causes deals to fall through is money. Whether the buyer struggling to secure financing or an appraisal comes in low. In many cases, the buyers don't have the money to do it. They need to do in order to get the deal closed.
How do you avoid that step as a buyer's agent? You should keep very, very close contact with that lender. And you should ask very specific questions. When you get a pre approval letter, you want the buyers, the lender to tell you that they've already verified the employment, they've verified the income, they have run a tri merge credit report, and they also know that the buyer has the sufficient cash to close the transaction at this price.
Sometimes people just get cold feet, and that's another more difficult problem to handle, and that falls on the shoulders of the buyer's agents. And it's not unusual for people to get cold feet. Which means a buyer's agent should tell buyers that, hey listen, over the next couple of days you might get cold feet.
But you've made a good decision, and you probably want to move forward. The last thing that causes deals to derail is having trouble under the hood, meaning there's an inspection problem with the property. And these would be presentable if you as a seller decided to get a pre listing inspection, which is a really great thing to do.
Or if you as a seller, instead of making a decision as to whether or not you need to do these things for this buyer, make a decision as to whether or not you might have to do them for the next buyer. Because if the answer is, gosh, if I don't do them for them, I might have to do it for the next person. In many cases, it doesn't make sense not to do it for the person who's there at the table.
If you're looking to sell your house anytime in the next 12 months, we think we can get you 28, 000 more than your neighbor. To find out exactly how we do it, go to gogaddisradio. com, click on 28, 000 more, put in a little bit of information. This segment of the show is brought to you by the law firm of O'Kelley Sorohan.
They are our preferred closing attorney. Got offices all over Metro Atlanta. O'Kelley and Sorohan are absolutely amazing. They can be reached by calling 7704971880
7704971880. Going to take a quick break. When we come back in our neighborhood spotlight, Clearwater point and McDonough's being featured. Also, what size home do you really need for your family? And is a survey necessary when buying a home? Stick with us. We've got those and more. We'll be back.