Home Buying in a Seller’s Market

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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. We're in the midst of the wildest real estate market anyone has seen for a very long time. It's a seller's market, of course, and houses are selling like hotcakes. Hi, I'm Rob West.

Home values are sky high right now and quite often sellers are getting more than the list price, so I'll try to level the playing field a little today with some tips for buying a home in a seller's market. And it's on to your calls and questions. 800-525-7000.

That's 800-525-7000. This is MoneyWise Live, where the Bible is our ultimate financial advisor. Okay, so we know why the real estate market is the way it is today, and it's basic economics. High demand for houses and very low inventory. It will take the market some time to correct itself, but in the meantime, we've got an awful lot of buyers chasing after, well, not a lot of homes. Houses are going under contract within hours of being listed, often for more than the asking price. Bidding wars are breaking out. In some cases, buyers are simply knocking on doors and offering people a huge amount of money for their house, even if it's not for sale. So how does the average buyer compete in a market like that? Well, today I have a few tips to improve your chances of making a successful offer.

Let's dive in. Here's the first one, and it's to understand that you're in a seller's market, and a really strong one at that. It changes the dynamic. You see, in normal times, you'd make an offer on a home below the list price and below what you're willing to pay. Well, that won't work in the current climate. You've got to make a strong offer first. With your agent, look at the comparable sales, or what we call the comps in your area. If you see that houses are selling for the list price or above, you'll have to make a similar offer right out of the gate.

You probably don't want to start with anything lower than the list price. Then be prepared to go higher if there are multiple bids, but only up to your predetermined maximum offer. That's when you stop bidding and start looking for another house if your offer is declined.

For any of this to work, you've got to give yourself margin for bidding. If you've determined beforehand, let's say, that the maximum you could afford is a $250,000 home, well, you shouldn't look at anything listed above, say, $225,000. And don't assume you can afford what the lender says you're, quote, qualified for.

The mortgage payment should be, here it is, no more than 25% of your take-home pay. So, now you've given yourself margin in case you have to bid higher than your initial offer, but you should know that the sale, even in this market, doesn't always go to the highest bidder. You can do a few other things to make sure your offer is more appealing. For example, putting down a very healthy earnest deposit to show you're serious.

If earnest money is typically $20,000 in your area, put up $30,000. Also, minimize or eliminate any contingencies on your offer. The most common contingency is selling your home first. If you have to sell a home, get a non-contingent contract on it first before making the offer on your next house so you don't need to have that contingency. You can also shorten the amount of time you're asking for a home inspection. You can time the closing to fit the seller's needs, and even offer the seller more time before having to move out if that's desired. But you can do all of those things, have your offer accepted, and then run into a huge stumbling block that's common in a strong seller's market, and that's the dreaded low appraisal. This happens when home values rise rapidly. Selling prices get ahead of what appraisers are used to seeing. In that case, the appraisal comes in below your accepted offer, and then the lender won't accept or approve the loan. Now what?

Well, you have two choices. You can walk away from the deal, or you can increase your down payment to make up the difference between the appraisal and the agreed upon price. And of course, we always recommend that you put down at least 20% to begin with so you can avoid that dreaded private mortgage insurance. The most important advice that I could give you, though, is that you not get carried away in a bidding war and end up with a monthly mortgage payment that strains your budget. Understand that houses have gotten a lot more expensive, and what you thought you could afford last year may well be out of reach now. Also, you may need more cash on hand to get to the closing table than in years past. Oh, and one final thought, there's nothing wrong with waiting six months or even a year to see if things cool off in the housing market.

It's red hot right now, but it can't stay that way forever. Proverbs 19, 2 comes to mind. It says, desire without knowledge is not good, and whoever makes haste with his feet misses this way. Your calls are next, 800-525-7000. That's 800-525-7000. And by the way, you can call that number 24-7. This is MoneyWise Live, where the Bible is our ultimate financial advisor. Much more to come just around the corner.

Stay with us. So delighted to have you with us today on MoneyWise Live. We're taking your calls and questions. Phone lines are open, 800-525-7000. That's 800-525-7000. And by the way, that number is open 24-7. If you don't call during the broadcast, you can actually leave your question, and someone from our team will actually call you back, and we'll try to get you scheduled for a future broadcast.

We'd love to hear from you today, though, live and in person with your questions. We're going to apply God's truth, the principles we see in God's Word, to what's going on in your financial life, and here's the big idea. You know, it's not about just managing money so we can have more of it. It's not about building bigger barns. Remember, in the Bible, we see the person who tried to build bigger barns was called a fool. We certainly don't want to be that.

Here's my experience. My experience is that your financial journey is one of the key ways God shapes your spiritual journey. So if we recognize, beyond giving our lives to Jesus and trusting him as our Savior, having a personal relationship with him, it's then about stewardship, about managing everything God has entrusted to us, including his money, his money, and all of that. It's then about stewardship, about managing everything God has entrusted to us, including his money, but also our time and our relationships, all of it for his glory and according to his purposes. But this area of money is, I believe, one of the chief competitors to us surrendering full lordship to Jesus. And we see that time and again in the Bible. You know, you can't serve God and mammon or money, right? We see these two ideas next to each other. We need to choose the Lord as the center of our life, but our culture says that we can find fulfillment and satisfaction through things.

It's just not true. And so when we see money as a tool and put it in its rightful place as God's resources that we're to manage for his glory and according to his purposes, then it changes everything because the money is then helping to support what's most important to us, our values, our convictions, and where God is taking us. We want to find God's heart in all of that as we think about what lifestyle he's called us to and the next home we're going to buy, which is where we started today and how we should approach saving for the future. And oh, we should be giving. In fact, we should start with giving before we even determine our lifestyle spending. All of that I believe we can bring under the Lordship of Christ. And here's the great news.

There's 2300 verses in God's Word that deals with this topic. So we have all kinds of principles to draw from. Let's apply those to your financial life today. Again, here's the number a few lines open before we dive in. 800-525-7000. In just a moment, we're going to head to Florida. But first, Indianapolis, Indiana. Bill, you're our first caller today. How can I help you, sir?

Yes, sir. My wife and I are trying to make the decision if it's a better time to go ahead and take some money that's basically liquid assets and buy property, probably three years before we're actually looking at moving and building on that property. Because of the worries of the possibilities of investing it and getting taxed heavily on it if we was to put it in some sort of investment account with the current political outlook. Yeah, I think there's a couple of things going on here. I mean, clearly there are proposals from President Biden about increased taxes, both in terms of income taxes and capital gains, although the proposal in May really would only apply in terms of the capital gains increases to those with more than a million dollars in income. Now, whether that remains to be the case or whether there's changes and it affects folks with less income remains to be seen and whether it will pass at all. But it called for increasing the top capital gains and dividends rate to thirty nine point six percent, which is obviously very, very high.

So I think you've got that going on. And then the second thing is just keep in mind what we started with today is this idea that the housing market is red hot nationally. We're seeing the latest data says it's about six percent overvalued.

And you might say, well, that doesn't sound like much. Well, the idea is that there is very low inventory with a lot of demand right now for a variety of reasons, but it's still overvalued. And so although I don't think we're going to be in for anything like we had no eight and nine, which was a whole set of issues that don't exist today with the credit crisis, I do think we're going to see a cooling off of the housing market that could cause these sky high prices to take a dip. Now, could they continue to rise for a year or more before that dip?

Sure. But I think this idea that you're buying at certainly the top of the market, it may still have some ways to go here. But I think given that you've got these three years and we know that we've got a lot of debt in this country, we've got some inflation concerns right now, we've got a stock market that's overvalued. We've got a housing market that's overvalued. I think I'm not going to predict what happens because nobody can.

Only the Lord knows where it's going from here. But this idea that you could wait and perhaps buy it when it's a little closer to when you actually plan to use it probably makes some sense for me because I believe we will see a cyclical rollover of our economy and the stock market. Unless we've already started a new bull market phase, which some can argue, I think we probably have some room to see a downturn here before we enter that phase. And I think the housing market could be a part of that. So you could find yourself buying something today and then a couple of years from now, let's say we're headed into a recession and all of a sudden the housing market's taken a dip and you're losing some value there. So I think that's just kind of all the dynamics you need to look at. But I don't see anything today that would cause you to say, I need to move quickly because of either policy changes or what's going on in the housing market. Especially if it's not something you're looking to utilize today. Does all that make sense, though, Bill? Yeah, it does.

Thank you so much. And it really is just a concern about with the amounts that we have that we could actually go in and liquidate very easily and put onto a piece of property and then just kind of set even have, you know, leave it basically just leave it set. It was the concern versus, you know, do we take that money and get it go get it locked into, you know, into some sort of mutual fund or some sort of investment account, something like that, and then have to, you know, if all of a sudden something presented itself and, you know, how quickly that would be for us to liquidate it and penalties and so forth, you know, was the biggest concerns. Well, no, I totally understand that.

Is this taxable money, meaning it's outside of retirement accounts? Yes, it is. Okay. So that's another side that I didn't address. And I think that's a great point. You know, if your time horizon is three years or less, and it could be less because, as you said, an incredible opportunity presents itself. Those incredible opportunities are fewer and far between just in the real estate market right now, but it doesn't mean it couldn't happen. With a three year or less time horizon, I absolutely concur you don't want to be invested in stocks.

Now, you could say, well, I'm just moving from one long term, you know, investment strategy asset class to another asset class. But you have to recognize if you're going into the stock market right now, you know, three years from now, we could absolutely be lower than we are right now. And, you know, if we were into a bear market, and we certainly could be, you know, I think if you were fully invested in stocks, you could take a hit of 35%. I mean, on average, that's what we would see for somebody who's fully allocated to stocks, if you're trying to pull out, you know, right there in the midst of a bear market.

And that's obviously not a hit you'd want to have to take. But you'd, you know, have you'd be conflicted at that point, because you'd have this opportunity to buy. So I think as much as it might pain you to earn a half a point in a high yield savings account, that's probably where I'd keep my money just so that you had the ability to first protect what you have, even though you're not growing it significantly, and while you're waiting for that opportunity to present itself. Right. And that's exactly where it's setting at. And that was, that was the other side of it, you know, that, okay, do we go ahead and buy? Or do we go and at least get it out of the savings account and move it over into stocks to where maybe we're, you know, and looking at maybe making more, but at the same time, then you start looking at the risk factors.

And it's like, well, it just looking for looking for good Christian advice has been well worth the phone call. Well, I appreciate that. And I think, you know, the time horizon is just not on your side with regard to being fully allocated to stocks right now, as much as you might not like to see it, just kind of treading water, I think, you know, with your plan, which I think is a good one. The return of your capital is more important than the return on your capital.

So you have the ability to move at the right time. And you're not having to sell out, you know, when stocks are down or investments are down significantly. So I'd stay the course, ask the Lord to give you some wisdom as to the right timing to buy that property.

And I think I'd probably stay right where I am. Does that make sense? Yes, sir. Thank you so much.

God bless. All right, Bill, thank you for your call today. You know, this is a challenging question that we run into from time to time, because so often, with money that we know we're going to deploy, maybe a few years down the road, we think, well, we really don't want to just sitting there not really earning anything interest rates are so low. And yet, as I said, it's so important to match the investment strategy with the time horizon and not get ahead of ourselves. Hey, we're going to take more calls and questions just around the corner.

Someone wants to know what about buying a lottery ticket every now and then? I'll certainly weigh in on that. Plus more right around the corner. Stay with us. We're glad you're with us today for MoneyWise Live, where we apply God's truth to your financial choices and decisions. We're taking your calls today. We have a few lines open. Here's the number 800-525-7000.

That's 800-525-7000. We've got a whole host of questions lined up here, including this one. We're going to go next to Miami, Florida. Stephanie, thank you for your patience today. How can I help you? Hi, so I'm going to Tallahassee and I'm a first time home buyer with cash and low budget of $80,000.

Any recommendations that you could give me? Yeah, well, I'm excited for you as you think about this first home purchase. It's a big decision, one I know you've probably given a lot of peripheral consideration to, and it sounds like you've been a diligent saver. Did I hear you say you have $80,000 available for the down payment? Is that right? Yes, so my goal is to buy – I mean, I would like – I don't want debt, so I don't want to get a mortgage. So I'm looking for – well, I found – in fact, I found an apartment for $82,000, right? So I went under contract, but I can get out of it. So I just wonder if it's a bad idea. I'm moving there. I don't know.

Any recommendations that you can give me? Yeah, so if I understand correct, you're planning to be able to buy this with cash, right, based on the savings that you have? Is that right?

Yes. So the problem is I think it's all my savings. I will not have any – not really. I will have probably $2,000 as a savings afterwards, you know?

Okay. Yeah, I mean, I think that's the only concern. I love the idea that you would go in and buy it with cash because you don't want to have debt, and I certainly don't want to be the one to talk you into taking on debt. I am a little concerned, though, with you making a move, buying a first time, your first home, having to get into it. You're always going to have some unanticipated expenses that come your way, and with you being kind of right down to the wire in terms of using all of your available cash, that's concerning to me. I don't want you to have a bunch of cash left over and then buy a bunch of expensive furniture and things like that that just eats it up, but I do want you to have enough margin to be able to get into it, connect the utilities and all those extra expenses that you have. Plus, there's probably going to be a few little things you're going to want to do or things you're going to need to buy. Certainly, you can do a lot of it over time, but I don't want something to come out of unexpected from left field related to the house or something else, and then you not have any money, and then you're having to go to credit cards or something like that.

So I guess my only question would be here, Stephanie, is could you either A, delay the move until you can save a bit more, until you have at least a couple of months worth of expenses in the bank as an emergency fund after you buy the house and all the transaction costs, or would it make sense to take on a very small mortgage? Again, I don't want to talk you into taking on debt. If you have a conviction not to, I'd say, you know, let's find every other way to do it apart from that if you really are convicted about not taking on debt. But one option would be to take on a very small mortgage, keep some liquidity, and then make a goal that every month as you have the money available, you would put it right against that mortgage and pay it off, you know, very, very soon.

So tell me about that, though. What is your plan to kind of rebuild your savings if you were to use all but a couple of thousand dollars on this home purchase? So the thing is that when I move, I have to move in August because I have school there. So and then the other issue was, like, I was I was thinking of only doing six months rent, right? But if I found the right opportunity, I wanted to be able to get out of contract.

The problem is that is very high. So this is town where everybody leaves for a year. So I couldn't find anything for six months. And then the other thing is that I and then my other things that I would what was the other question? Well, I'm just saying, what is your plan to rebuild your emergency savings after you spend all the money to get into this new home? Oh, okay. So my my idea was that is like what I was going to spend on rent. Just start saving it and they put it in that in my, you know, like, account.

Okay. And how much margin do you think you'd have after your expenses every month? Well, I know not like if I don't have to pay rent, right? I mean, my rent instead of putting it in for rent, it's going to be for savings. I don't spend that much money. I only spend my $500 a month of food and I have a budget. So it's not I'm not a spender. So yeah, I think that's how I was able to save $80,000. Got it.

Yep, I love it. Well, I think you're on the right track here, Stephanie. I mean, there's no question that rental prices, I was just having this conversation with a co worker earlier today, rental prices are sky high because of what's going on in the housing market. So it can make a lot of sense if you can find a place to buy and certainly if you can pay cash, as you said, then you have the money you would have been putting toward rent available every month. But just stay focused on keeping your lifestyle expenses as low as possible.

So you can put every dollar toward rebuilding that emergency fund with a goal of three to six months worth of your total expenses in your emergency savings before you save for other things. We appreciate your call today. All the best in this new chapter of your life in Jacksonville. Folks, stay with us. Much more to come on Money Wise Live. We'll be right back. Thanks for joining us today on Money Wise Live.

Vote lines are open 800-525-7000. I'm Rob West taking your calls and questions as we apply God's word to today's financial decisions. Just ahead, we're going to be talking about whether or not it's appropriate to buy a lottery ticket and how to use your HSA funds for medical bills. We'll talk about paying off a house and refinancing.

But first, Cassandra is in Chicago, Illinois, WMBI. Thank you for your call today. How can I help you? Hi, I'm actually calling because I've always heard you mention that your mortgage payment should not be more than 25% of your take home pay. My question is, should that apply to both couples or just one of the person and we're both working? So that applies to my husband or my or my income?

Yeah, that's a that's a great question, Cassandra. Yeah, I would look at you and your husband as one flesh, right? So that's the way the Bible describes it. And I think that applies to everything in your life, including your finances. So when I'm talking about dealing with money and developing a spending plan, it's, you know, unpacking as a couple, what are our values?

What are our goals? How can we use money as a tool to accomplish that, even though there might be one bookkeeper? It's ours together as one flesh. So it doesn't matter who's working and who's not in your case, both of you are working. But I would see all those resources as one as a married couple. And then you say, Okay, now, for our total budget, our spending plan with whatever income sources we have, and in your case, there's at least two of them.

How are we going to allocate God's resources? So when we develop that spending plan, obviously, one of those categories is housing. And so what I would say is your take home pay is after any deductions for your retirement account. And if you have company, you know, health insurance that comes out, you're going to have a net amount that's coming in from both of your incomes. And when you look at your housing category, and you look at your specifically your mortgage payment, principal interest, taxes and insurance, in order to have enough for everything else, you really should make sure that that mortgage payment is no more than 25% of all of the income sources, net take home pay, but all of the income sources coming into the house. So short answer is it would be both incomes that you would build that around. Does that make sense, though?

That makes perfect sense. We appreciate your call today, Cassandra, very, very much. To Dave in Illinois. Dave, what's on your mind? How can I help you? Hi, Rob, thank you so much.

You have an excellent program. Now, I know the Bible frowns upon gambling, but I sometimes wonder what's wrong with buying a lottery ticket here and there? And you know, that's the first question.

The second question is, if you win, would you recommend creating an LLC account to become anonymous? And how would you go about hiring a specialist and investment specialist to, you know, give you recommendations after Of course, you've given 10% to your local church, Moody Bible, and of course, money wise.org. Thanks, Dave. You know, the Bible doesn't explicitly say that gambling is a sin. So we have to look at financial principles for an answer. And I think the starting point with all of our money management, Dave, is this recognition that God owns it all. And we're his money manager or steward, which means you and I are money managers for the creator of the universe, which is a pretty high calling as we manage God's money. And then we take direction from the master, right? Because if we're managing someone else's money, we probably know what they want.

We should know what they want us to do with it. So we go back to God's Word and we say what principles can we draw from here so that we know how the Lord wants us to manage his money. And I think, you know, there are clear warnings about a get rich quick attitude. I mean, the one that comes to mind most quickly is Proverbs 13 11, wealth gained hastily will dwindle, but whoever gathers little by little will increase it. And then there's the highly addictive nature of gambling that I don't think we can ignore. 1 Corinthians 6 12, all things are lawful for me, but not all things are helpful.

And I think all things are lawful for me, but I will not be enslaved by anything. And, you know, also, unlike investing, I think gambling is a zero sum game. In order for you to win, somebody else has to lose.

So you're contributing to another's losses, which, you know, perhaps conflicts with love your neighbor as yourself. So I just think when we look at the whole of Scripture and the Council of Scripture and we recognize our role as a steward or a manager, I just don't see how we can get, at least for me, this is my conviction, how I can get comfortable using God's money this way when I see, I think, some clear indications that really the idea about growing God's money and clearly we should be about seeking a return on our investments. The best description of that that I think we find in the Bible is these two words steady plotting. And I just don't think that gambling has anything close to this idea of steady plotting. And so for me, I would say because of those reasons, it's a zero sum game. It's, you know, really detrimental to so many people who have gotten into it and are now addicted to it. Not to mention that it really is about a get rich quick attitude, which is clearly frowned upon in the Bible.

I just think we have to leave it behind and say that with God's money, being a careful, faithful steward of that money, I just don't see any room for gambling in there, though. Does that make sense though, Dave? Yes. Yes. Thank you. I know you would say that.

Thank you very much for confirming my suspicion. All right. Well, I appreciate it. I will say, though, you mentioned a wise investment counselor, and the Bible is replete with counsel about seeking wise counsel. So I think you're on the right track there, but I would say no to the lottery tickets at every turn. We appreciate your call.

Jose's in Florida. How can I help you today? Thanks for taking my call.

I really appreciate your ministry. We are looking to refinance our home, but we're trying to reduce the amount of years. I'm in a modified loan that they extended to 47 years to be able to lower the payment. The interest rate is going to be lowered. It's currently at 4%. It's going to be lowered to 2.49, and we're going to lower the payments to either 20 years or 30 years. Right now, it's still 0457 payments. So my question is, they're looking to put in about $12,000 back into the loan so that there's no upfront fees. Is that wise? Yeah.

Well, let me ask you this. What is the value, the size of that mortgage today? $286,000.

All right. Yeah, I mean, the closing costs you're talking about are just sky high there. I mean, you're talking about 4%, which is probably double what I'd like for you to pay. But you're also talking about a lower rate here than what is the prevailing rate today.

So there's probably some discount points in there, which I don't think is necessary. So I'd get a few more bids. Jose, clearly you want to replace what you have, but I'd look to spend no more than 2% on closing costs of the total value of the mortgage.

So go to bankrate.com and look for some online lenders that can give you a really competitive bid with low closing costs. And let's get that term as low as you can fit into your budget. I'd love for it to be 20 years or no more than your current term remaining today. We appreciate your call. I hope that helps. If we can help in the future, let us know. This is MoneyWise Live. We'll be right back. Thanks for joining us today on MoneyWise Live, where God's word meets today's financial decisions and choices. Just ahead, more of your phone calls. We'll be talking to Heather in West Palm and Debbie in Mississippi.

Danica's in Nebraska. But first, it's time for our MoneyWise Market Commentary. Each Monday, our good friend Bob Doll stops by. Bob is a Wall Street veteran, a well-known market analyst. He's the chief investment officer of Crossmark Global Investments, a leader in faith-based investment management. Bob, great to have you with us.

Thank you, sir. Bob, in your deliberations this week, you spoke of a jump in core CPI inflation, the consumer price index. You and I have talked about inflation the last several weeks, but what is this new data telling us, and are there areas of our economy, in your view, where these price increases perhaps may be here to stay?

Well, let's put a finer point on it, Rob. This is the biggest increase in inflation we've seen at the headline level since 2008. And more importantly, for core prices, that takes out food and energy, as if you and I don't use food and energy. At core prices up the most since 1992. So these are not just kind of a little bit up.

These are noticeable increases. The raging debate on Wall Street right now is, is this inflation pickup temporary, to use the Fed's word, transitory, or is inflation legitimately picking up? And no one knows for sure the answer. I think the answer is some both.

And so, you know, the listeners, I'm sure they can identify. I mean, if you bought a car recently, a specially used car, if you've gone to the grocery store recently, you notice these prices are moving up, Rob. And that's a function of inflation in the system, and it's not going to go 100% away, in my opinion. It'll be better by the end of the year than it is now, but it'll still be higher than it was a year ago. The zero to 2% inflation world you and I have lived in for things like forever, call it a decade, is probably over.

Yes. Well, that's a significant statement you just made. The question, I guess, or one of them is how much of that, what you just described, has the market already priced in?

Well, that's a great question. One of the dilemmas here is that the bond market has actually had a rally over the last couple of months. Remember, 10-year Treasury yields were just under 1% at the start of the year, got as high as one and three quarters. And now, despite this inflation, these inflation readings, has backed off to about one and a half percent.

So, it's a head scratcher to some degree, Rob. The equity market is mixed as well when it comes to that. So, the markets don't really believe inflation's a problem yet, but I think that's just a kind of a sleeping giant waiting to jump at some point in time. Bob, do you think this new data caught the Fed by surprise at all, and do you think they're considering a change in their approach to keep inflation in check? Well, as you know, the Fed is not an on-off switch, and the last thing they will do is raise rates. They have a number of things they can do in advance.

In particular, tapering. Remember, the Fed is buying tens of billions of dollars of paper per month, and the question is, will they taper? Will they slow down the amount of those purchases as they meet this week? And I think the answer is probably yes. They're going to have to thread the needle and not get the investors and the economy upset about this inflation.

They need to slowly take the punch bowl away. Meaning over several years. Yeah, absolutely. Well, I know you're still expecting strong economic growth and earnings growth in the midst of this inflation. We are resilient as a nation. What is your newest thoughts this week about where we're headed from here over the balance of the year? So I'm still of the somewhat boring view for the stock market that it's going to be, you know, two steps forward, two steps back. The easy money has been made. I remind listeners, Rob, that the stock market is up nearly 90% from its lows last March. So there's at least some good news in the markets on this good economy and good earnings with all the money cash that is that sloshing around the path of least resistance is still higher, but it's not going to be a one way street as we grapple with this great economy great earnings on the one hand and questions about inflation and interest rates moving up on the other.

Yeah, very good. Well, Bob, there's a lot more we could talk about, but we'll save it for next week. Always appreciate your insights. You know, as investors, as you always remind us, we have to focus on the long term. We need to be steady plotters.

We need to be properly diversified with an allocation that matches our age and goals and objectives. But I love the fact that we can stay abreast of what's happening around us in the near term because then we're more effective and informed as stewards of God's money. So we always appreciate your time, my friend.

Well said, don't let the emotions get in the way. All right, talk to you next week. Thanks, Bob. Bye. Back to the phones.

Nebraska is where Danica is today and Danica, I appreciate your patience. How can I help you? Hi.

Yeah. So my question is about my HSA. So I have an old HSA from a previous employer, so I don't have that high of a health plan anymore.

But I was wondering, I'm about to have elective surgery. And I'm wondering, is it better to go ahead and take use that account right away or just to pay out of pocket and then take the distribution at a later date just to let the money grow in that account? Or what is the option? Yeah, I mean, obviously, if you have an active HSA, I like the fact that you would really prioritize getting enough in there, if not maxing it out, because the real benefit is to let that money crew over time because it can be a really powerful tool as a part of your retirement arsenal, if you will. If you have money that you can actually invest beyond what you need and it can build up over time.

And so it makes a lot of sense to do that. But with an active HSA, you want to be obviously putting in enough so that you can at least cover your medical expenses because then you're doing it with pre-tax dollars, which is one of the benefits of the HSA as opposed to you paying out of pocket, which is after tax dollars. Now, the question is, what about when you don't, you're no longer using it? Because as you said, you no longer have that high deductible health plan. So this is just an asset that you have. And then the question comes down to, should I keep this and let it grow? Will it be more beneficial for me down the road? Or is it more beneficial to use it today? And I think given the fact that you're no longer contributing to it, as long as you're not borrowing for those medical expenses, if you're able to use cash, and not, you know, completely deplete your emergency fund, I'd probably let that money just continue to grow, get it invested. You know, you have the tax deferred growth, and then, you know, your withdrawals are tax free in your later years when you're likely to incur more medical expenses. And after you turn 65, you can start using your HSA for non healthcare expenses.

So you know, the 20% early withdrawal penalty no longer applies. So I think, you know, there's a real opportunity here for you just to let that asset grow, get it invested. And assuming you have the ability to fund that out of cash, I think that's not a bad idea. Now, if you said, Rob, I'm either going to deplete my emergency fund or I'm going to have to borrow, well, then absolutely use the HSA. But if you have the cash to do it, I think you could have some benefit in just letting this account grow in the future.

Does that make sense, though? Yeah, yeah, that's kind of what I was thinking, because I do have, you know, I have the funds to be able to pay for it out of pocket, but I just wasn't sure if, you know, taking it out and draining that HSA was even a good idea. You know, later on the road, I might need it more than I need it now.

Yeah, sounds like it. And I think that's a great choice. So we appreciate your call today. All the best to you and wish you good health.

To Mississippi, Debbie, thank you for your call today. How can I help you? Yeah, I have a question. My question is, if I had two properties right now, and it's almost three times what I'm making, I mean, what I paid for it if I sold it currently, you know, but with the taxes and everything, it's actually what it is, is one I'm using for rental and one I'm using for vacation. If I should go ahead and sell it now, even though I'd be paying, you know, higher taxes for it, or what our thought was, is we've been hanging on to it because my husband recently retired, I'm retired, and allowing that to be there in the future for anything that might, you know, happen, you know, and for like, if we go into nursing home or that kind of thing. So would it be better to sell it in this higher market and invest it or just hang on to it like I'm doing? Yeah, Debbie, I mean, obviously, we don't know what the future holds.

But, you know, here's just some observations. Number one is, you know, you are in a situation where property values are the highest they've been in a long time. Does that mean they couldn't go higher from here? No, we could certainly see some more upside, but they are overpriced, overvalued. And so I think a cooling off of the real estate market is certainly reasonable to expect. So I think this is a good opportunity to exit. And then secondly, capital gains are still taxes are very low. And so I think this actually might be the ideal time to sell. Again, not knowing the future, but knowing that where the real estate market is knowing how low capital gains taxes are, and knowing that conditions aren't likely to improve beyond where they are now, either in the tax scenario, because the proposals are, you know, anything being considered as takes the capital gains taxes up question is, you know, which income earners does that apply to but nothing, we're not seeing them going down for sure.

And I don't know that conditions are likely necessarily to improve in the housing market is probably more, it's more realistic to think it could cool off. So this may be the ideal time to take that money out, pay that low capital gains and then redeploy it in an investment strategy that makes sense. And if you need an advisor to help you with that, you can find a certified kingdom advisor in your area at our website MoneyWiseLive.org. We appreciate your call today. Folks, that's going to do it for us. So thankful that you stopped by as we applied God's truth to your financial life. I want to say thank you to my amazing team, Dan Anderson engineering today, Deb Solomon was our producer today, Jim Henry providing research and thanks to you for being there.

MoneyWiseLive is a partnership between Moody Radio, MoneyWise Media, we'll be back to do it all again tomorrow. I hope you'll join us. I'll be here. We'll see you then. God bless you.