Appearing as a guest on Good Morning America this week, Barbara Corcoran answered several questions from viewers, ranging from when the right time to buy a home is to how to win a bidding war. As for the former, Corcoran said now is the time to buy.
Its a good time to buy because the minute interest rates go down, everybodys waiting for them to go down even by a point, and when they do, theyre going to come rushing back in the market, Corcoran said. Prices are going to explode, and youre going to be paying more for the same house. And you can always refinance, remember, when and if interest rates come down.
Its not Corcorans first time advising against even attempting to time the market. Previously, on the Chicks in the Office podcast, Corcoran said to forget about the timing, again stressing that now is always the time to buy.
The self-proclaimed NYC Real Estate Queen, founded the Corcoran Group with a $1,000 loan in 1973, which she famously turned into $66 million, after selling her business in 2001. Shell always be a powerhouse within the real estate industry, but now most people know her as the spunky, blunt, and well-dressed shark on ABCs Shark Tank.
Another viewer asked Corcoran how to win bidding wars, saying that he and his fiancee have been looking for a house but have been out bid every time theyve found one they like. Corcoran said the key is to look like the best deal in town, while playing on the sellers emotions.
You have to be prequalified for your mortgage so you can go in there as an all cash deal. Im an all cash deal, its not contingent, I already got my mortgageyou want that power behind you, Corcoran said. You also want to go in and realize its never just a financial deal. Get a nice piece of stationery and handwrite a note to that owner, and tell them how much you love the house. It makes a difference because people like to sell homes to people who love their house.
As for the different types of mortgage loans that buyers can choose from, Corcoran said it depends on how long youre going to live in that home. If youre going to live there a long time, or at least except you are, Corcoran said a conventional rate mortgage at the shortest term you can afford, is the best option. On the other hand, if youre only going to be living there for a short period of time, likely under five years, she said youll want to get an adjustable rate mortgage because its cheaper.
When Corcoran was then asked if theres any way to get relief as someone whos house poor, a term used to describe someone thats spending more than 30% of their income on housing, she answered: you dont get relief from that. In coastal cities, Corcoran said, people are spending more than 40% of their income on housing. But theres a light at the end of the tunnel, in her viewpeople are forced to save by paying off their mortgage.
When it comes time to retire, for most of us, its the only money we have to retire on, Corcoran said.
Now if you want to make the most out of your home purchase, she said youll always get the best return in a high-traffic area. And if you want to make a killing, buy a home in an up and coming area. Corcorans formula for doing so? Follow the creative community and see where theyre living, and check out the nightlife.
And of course, a Corcoran Q&A couldnt be complete without touching on rentals and renting. As for rent prices, Corcoran said theyre going to continue to go up, and there wont be any relief. When interest rates go up and chase people into the rental market, rents generally go up. But when interest rates go down, that doesnt mean rent follows. Corcoran said shes never met a landlord that brings down their rent, ever. And, most of us know how she feels about rentingthat its a no-win game.
