I have seen purchases of homes fall apart over a couple thousand dollars, and with today’s rates that amounts to just a few dollars a month- or, as I like to put it: a couple of coffees.
Here’s an example:
Mr. and Mrs. X put an offer of $270,000 on a home that was listed at $279,900. Their offer was countered back at $277,900. Mr. and Mrs. X signed back at $274,000. They agreed that this the absolute most they were willing to pay for this home, even though it had most of what they were looking for, was in their desired neighbourhood, and they only had 2 months until having to move from their current home.
Unfortunately for Mr. and Mrs. X, the sellers came back with $276,000, $2000 more than their final offer. Without further consideration, Mr. and Mrs. X decided to walk away from the purchase.
They headed to a local coffee shop, tired and frustrated. Mr. X purchased a coffee for himself and a latte for his wife, and sat down. They were upset that their offer of $274,000 wasn’t accepted, considering they had even agreed to the seller’s desired closing date.
“I wasn’t going to pay $2000 more for that house”, Mr. X told his wife, “I can think of a lot more things I’d like to spend that money on.” He took a sip of his coffee.
Mrs. X agreed. “Maybe we’ll just have to rent until we find another home.”
But what Mr. and Mrs. X didn’t realize, is that with their 20% down payment, the monthly mortgage payment on a purchase price of $276,000 would be $1032.51, a mere $7.48/month more than it would be on a purchase price of $274,000. The irony is that Mr. and Mrs. X had just spent $7.50 on their beverages.
Don’t lose out on the home you love over a couple coffees.