How two families beat the odds By Ben Geanetta, REALTOR®, Team Lead
Ah, the sweet symphony of home buying, where the chorus often sings, "It's not the right time to buy a home," or "Mortgage rates are too high." While the second statement might hold a note of truth, many would-be homeowners are tuning in without the guidance of a maestro—a real estate professional or mortgage lender. So, put Google aside and put away the online mortgage affordability calculators, and let's dive into two families who defied how most are viewing this housing market.
Family One: The Native Navigators Picture this: a blue-collar family, born and raised in the scenic idyllic of Sandpoint, dreaming of the idea of homeownership for the past seven years! They kept kicking the can down the road, chanting the annual mantra, "Next year is the right time." Well, seven years waltzed by, and guess what? The home prices hit the dance floor too! Soaring higher than anyone could have imagined.
One day I got a call from this family, and they wanted to meet to discuss the local market and the home-buying process, seeing as they had never purchased a home before. We met at Monarch Mountain Coffee, and we had a wonderful conversation. They shared with me what they perceived as what they could afford based on online calculators and Google searches. What they didn't know, many factors go into what one can afford, and the online calculator cannot account for those variables. Plus, a good lender can strategize and utilize programs to each individual's circumstances.
After providing this family with confidence that they could own a house in their hometown, they discovered their perceived home affordability was $200,000 short of what they purchased. And to their surprise, they were approved for an even higher amount! All of this became possible because they had the courage to take action by picking up the phone to schedule a meeting to thoroughly educate themselves about the process of buying a home.
Family Two: The Out-of-State Trailblazers Enter our second family, who were captivated by the allure of Sandpoint's trails and snowy slopes. This family had already purchased a few homes in their lifetime but knew this was a much different market. To help increase their odds of making an informed decision, they too schedule a time to learn about the local market and spent time game planning with their lender. They finally found "The" home and quickly made an offer. They were not in love with their mortgage rate of 6.5 percent but understood this was going to be a temporary rate until they refinanced.
I called them roughly 30 days after they purchased the home to check in and they asked where rates were ... shockingly they had climbed to 8 percent! They were thrilled when they purchased because that extra 1.5 percent would have cost them thousands of dollars.
Five months later, the news of Alterra Mountain Company purchasing Schweitzer Mountain broke. They were instantly determined to find an investment property on the mountain knowing property values were only going to continue to climb.
With no chest of cash, they waited for the right property and, lo and behold, a diamond surfaced! This time their rate was at 8 percent, however, I was able to negotiate a three-year rate buydown, making their mortgage rate 5 percent! Knowing they could rent the condo for more than the mortgage, and having affordability relief for the first three years, made this a deal they couldn't pass up.
Reflecting on the journey of these two families in 2023 unveils a narrative of more than browsing; they were conductors, orchestrating symphonies of homebuying triumphs. Armed with insights into the local housing market, they learned their true buying power and composed a winning game plan in a market that many perceived as unfavorable to buy in. They didn't stand in the bleachers as spectators; these families navigated a landscape where they faced minimal competition, enabling them to request concessions without the pressure of a bidding war surpassing the asking price.
Yes, both families will be making some adjustments financially however; the sweet harmony lies in the fact that they secured homes they love at a more favorable price than awaits in the future. And the mortgage rate, yes it’s high now, but rates fall while home prices go up.