I always want to cut to the chase with some figures. The following table shows the monthly payment for each loan amount and interest rate.  A buyer today at 5% interest borrowing $100,000 has a monthly principle and interest payment of $536.82.  If prices deline 5% (and the loan amount does also) and interest rates rise just 1/2 of 1%, then the monthly payment remains almost the same ($539.40).

So if rates go up just 1% to 6%, then prices must drop at least 10% for that same buyer to qualify for the same monthly payment.  Check out the link below:

interestratevspricing0001

The point being is that if you believe that much of the price decline has already happened and you anticipate interest rate increases…and you should.  Why?  Because interest rates are the lowest in recorded history.  But, also at some point, the Fed is going to have to start recouping some of the intense borrowing that has happened to attempt to “jump-start” our present economic slump.  I definitely do not pretend to have the answers, but do have lots of questions.  All the same, the numbers “speak” to me.

I have a theory of business that “like attracts like”.  It’s no different when choosing a Realtor to help in the sale of your home whether or the purchase of a new home whether in Portland, Oregon or Timbuktu. I know the most successful business relationships come from referrals from my existing client base. But, every business relationship has to start somewhere. So, a second good way to establish a business connection is through “web relationships”.  Blogging & social media has replaced the conventional web site basically because it allows the buying public to feel a connection with the blogger or participant. An online relationship can evolve through an understanding of the personalities and core values.  A business mission should convey those core values. And, not just generic values like honesty, integrity….those should be assumed for any business relationship.  Convey your core values through your example!  I’m frugal, conscientious with my money, I always run the numbers. I own investment property and absolutely believe that over the long haul real estate is still definitely one of the most attractive investments.  Why is that?  A house is home & hearth for your primary residence, you can establish a budget based on an established mortgage amount (as opposed to rent which tends to increase) and it feels good.  An investment property is something you can drive by to look and touch, it’s a great write-off and someone else pays (at least most) of your costs.  There will be no pressure because you must determine how this investment will work for you (with any help I can give).

Anyway, I digress from how to choose an agent.  Choose based on your core values and needs. This is a business relationship with a lot of personal connection.  You will find that you will be speaking with your agent a lot more than you want to talk with anyone besides friends and family!  Make sure your core values are “heard and understood”.