Should I Buy Now or Later? - Opportunity Costs

Should I Buy Now Or Later - Opportunity Costs

Buy Now or Later? Opportunity cost is something that we all have to deal with whether we realize it or not and it happens in real estate as well. Should you buy the home now or wait at a later time... for what ever the reason.

Today I wanted to go over an example of a past buyer who experienced the same dilemma, Buy Now or Later.

So this buyer I first met several years ago and she was a single woman who wanted a small home just for her and her cute little dog. The homes we were looking for were in the $110,000 to $135,000 range. The first time we searched she loved a specific neighborhood but when she found the home she loved she decided to wait to see if the rates would go down. So the following year we tried again but this time the prices were in the $140,000 range for the same neighborhood. The same thing happened she decided to wait in hopes of a lower interest rate so she renewed her lease for a year. Well another year passed and the same story.

The fourth year came and the same situation happened, this time the prices were now nearing $200,00 and the rates were about the same. This time however the interest rates were no longer the problem... the prices were the problem. The prices had go up so much that it was no longer affordable to her and as a result she could no longer buy, even if the rates dropped. So in her case she missed an opportunity to buy at a lower price which was no longer available.

Examples like this happen all the time in real estate but most realize it within months of holding off on buying and then come back determined to purchase before prices go up again. I will say most clients starting out already realize it so this is usually doesn't happen.

I want to confess and say that it happens to me and I wanted to give you my latest example. So I ever since I sold my little truck that was my third vehicle I have been wanting another small truck to replace it. Since then I have been keeping my eye on the market and have focused on what the market is for the exact type of truck I wanted.

Earlier this year when the pandemic first hit if you remember the used car market crashed. No one was buying cars and as a result many of the prices were really low. At that time I found a truck I wanted so I went to go look at it but decided I wanted to ask for another $200-$500 off. Keep in mind the price was already really good. I let the salesperson know and went home.

Two hours went by and I decided that the price was already low and that I would go ahead and purchase it at the advertised price. So I called up the sales person to let him know of my decision but to my surprise the truck had sold. Fast forward a couple of weeks and the market prices were red hot. The deal I had found just did not exist anymore no matter how hard I looked.

So I missed out and if I were to buy the same truck now it would be another $2,000 more than the deal I had found. So that is the opportunity costs, $2,000 because I wanted to wait. So I am guilty of this too, but today I wanted to share an example I see in real estate all the time.

I hope you found this video helpful! If you are in the North Texas area or Dallas Fort Worth area and thinking about buying, selling or just want to talk real estate please feel free to reach out!

With the heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate. I strongly feel an informed and educated consumer will be more confident & make better decisions.

Have questions about this or other topics, do not hesitate to contact me.

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Luis Cuevas, Broker/Realtor®

Serve Realty

(214) 783-0535

Luis@ServeRealtyTx.com

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