Buy or wait on the sidelines for a better deal in the current property market?

Heather Chilvers from Coldwell Banker Bermuda Realty looks at the situation of a buyer finding the right property that meets their needs and falls within their price range. Should they make an offer or in the current market or should they wait to see if a better deal comes along?

Why it might not be best to wait for a better deal:

The economy is beginning to show some green shoots and mortgage interest rates are still low. Prices are still below where they were 7 years ago. 

House prices are attractive, transactions are up and inventory is slowly starting to diminish.  Rents can be higher than mortgage payments in some cases.  So it makes sense to think about buying a property. But some homebuyers are still wondering if they should wait for a better deal. 

There are valid arguments for both waiting and jumping in the market. Either choice has its risks. If you don't buy, prices can go upwards from here. You'll pay more in rent and when you decide to buy, homes that you could afford now may be more expensive, and possibly out of your range.

If you do buy a home, prices could go down, which will put you underwater longer, and possibly leaving you with an expensive asset that's harder to sell.

But consider this - what if you buy and prices go up? You'll accumulate instant equity, a savings account of a kind, Would you feel just as weighed down by owning a home if it were appreciating in value instead of losing value?

There are no guarantees that home prices will turn in your favour. Bermuda’s market can rise or fall based on it’s own economy, but there is one truth that never changes, you'll never know if you could have had a better deal unless you commit to making one.

At least, perhaps run the numbers, document what you spend in rent vs what you can afford as a house payment. As a general rule of thumb the banks work on a 50% loan to debt ratio. Meaning that you should spend no more than 50% percent of your income on your mortgage payment, taxes, house insurance and other debt i.e. car loan, credit card payments etc. Factor in other costs, such as moving, commutes, schools, and, of course, your down payment.

Buying a home isn't just about the money. It's about lifestyle, safety, comfort, security, and easy access to the people and amenities you want to be close to. 

You have to do what's comfortable for you and your family, whether that's remaining on the side lines or buying a home. But here's a tip, if you buy a property in a good neighbourhood that meets the needs of your household and budget, chances are, that you'll be pleased with your decision for years to come.

Heather Chilvers is amongst Coldwell banker Bermuda Realty’s Leading Sales Representatives. She has been working in Real Estate for 25 years. If you have a question for Heather, please contact her at or 332 1793. All questions will be treated in confidence.

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