The $50,000 Rule, Part II


Hi, I’m Will Layton, Realtor, in Virginia Beach. This is part 2 of the $50,000 Rule. Watch The $50,000 Rule Part I if you haven’t seen it already because there was a quiz at the end of it, and I’m about to give you the answers.

Okay, here’s the situation, let’s say you’ve set your budget at $500,000 but the house you really want in Virginia Beach can only be had for $550,000.  This is the $50,000 Rule in action. What do you do? And let’s keep it simple, we’re not talking about negotiating the price down to 500, let’s say that $550,000 is as low as the seller is willing to go. You have a choice to make; stick to your budget and buy a different house, or change your budget and buy the house you want. I’ve been in this situation a hundred times. About half of you will stick to your budget and buy a less expensive house and half will raise their budget to get into the best neighborhood.

There are too many variables to figure out what you will do until you are in this situation. If you tend to stick to a tight budget, I know what you’re thinking. There’s no way I’d go $50,000 over budget!” Well, if it only cost you $119 per month you might. And that’s the answer to the quiz from last week.

Here’s the math.

The monthly payment is $242 per month on a $50,000 loan at 4.124. $71 of that is principle. You are paying it, but you’re paying yourself. So it doesn’t cost you anything. That leaves the interest, $171, but it’s tax deductible, (if you itemize when you file your taxes), so Uncle Sam gives you about $52 back.

And that leaves… $119!

So what will your decision be? Experience has shown me that you won’t know until you are standing in the house you want to buy. To see the newest listings and learn about the best neighborhoods in Virginia Beach, visit my website at or visit us on Facebook, @LaytonRealtyGroup. Please call or email with any and all questions regarding homes, neighborhoods, remodeling vs selling, staging, all things real estate. I’m happy and eager to help.

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