Your home can sell for above current market value
Let us preface this by saying that it is not a guarantee that your home will sell for above market value. But let’s discuss why there is a good chance it will. Let’s say the interest rate on your home is 3% and your home is currently worth $450,000. At current market rates, this is saving a buyer anywhere from $700-$900 a month depending on the down payment needed. If a homebuyer were to purchase a home today in your market with a 3% interest rate and have the same mortgage payment as if they were purchasing your home for $450,000 at a 7% rate, that would give them buying power well over $600,000! It's bananas how much interest rates are affecting affordability in purchasing a home these days.
All that being said, this doesn’t at all mean you can sell your home for $600,000. Nobody wants to buy a home that they’ll see no equity in for 5-10 years. But people will pay a slight above market value price in order to get into a situation that gives them financial relief in their day to day life.
Sell Your Home Faster
Looking over all the benefits a buyer receives by getting an Assumable Home, you can see how attractive this type of home becomes in our current marketplace. Take for example a recent assumable home sale we did in Austin, Texas. A home built in 2021 went on the market in a new construction subdivision for $399,000. With plenty of brand new homes available around that price point, it was a tough sell, and we were anticipating having to drop our sales price to get a deal done. The homebuyer failed to disclose that they purchased the home with an FHA loan and locked in a rate of 2.75%! After a week on the market and only one showing, we changed the listing description and within five days, we had three offers submitted and ended up selling it for $25,000 over asking price. The buyers of the property ended up saving almost $1,000 in their monthly payment. People are craving an affordable situation right now and will give up a bit of equity in the home (ie. Paying a higher sales price) for immediate financial relief in their monthly payment. Plus, the longer they hold, the more they will gain in equity themselves. It’s a win win.
