What's 'Date the Rate' Even Mean?

Blog Written by: Ryan Giavasis | CRT, Realtors®

In a seller's market, where the demand for homes exceeds the supply, buyers often find themselves in a difficult position. With multiple offers on the same property, they need to make a compelling case to the seller in order to secure the sale. One way to do this is by using a strategy known as "date the rate."

"Date the rate" refers to the practice of locking in a mortgage rate with a lender before even making an offer on a home.

This means that buyers will have a guaranteed interest rate on their mortgage for a set period of time, usually between 30 and 60 days. By doing this, buyers are able to demonstrate to sellers that they are serious about the purchase and have already taken concrete steps towards securing financing.

There are several advantages to using this strategy in a seller's market. Firstly, it can help buyers stand out from the crowd. In a competitive market, sellers may receive multiple offers from interested buyers, many of whom will be offering similar prices. By showing that they have already secured financing, buyers can differentiate themselves from other potential buyers and demonstrate their commitment to the sale.

Secondly, "dating the rate" can give buyers an advantage when negotiating with the seller. By having a guaranteed mortgage rate, buyers can offer more certainty to the seller and may be able to negotiate a lower purchase price or other concessions. This can be especially useful in a market where prices are rising rapidly and sellers are receiving multiple offers.

Finally, "dating the rate" can give buyers peace of mind during the home buying process. By knowing that they have a guaranteed interest rate, buyers can focus on other aspects of the purchase without worrying about fluctuations in the mortgage market. This can make the entire process less stressful and more manageable.

Of course, "dating the rate" does come with some risks. If the buyer is unable to close the sale within the agreed-upon time frame, they may lose the locked-in interest rate and need to renegotiate with their lender. Additionally, if interest rates drop during the lock period, buyers may miss out on potential savings. However, for many buyers in a seller's market, the benefits of "dating the rate" outweigh the risks.

In conclusion, "date the rate" is a strategy that can be very effective for buyers in a seller's market. By locking in a mortgage rate before making an offer on a home, buyers can demonstrate their commitment to the sale, negotiate with the seller from a position of strength, and enjoy greater peace of mind during the home buying process.

For more information on purchasing a home, please contact Ryan Giavasis, your go-to Columbus,Ohio Realtor® at ryangiavasis@crtrealtors.com.