2021 is flying by and we are already prepared to head into the second half of the year. If you’ve been thinking about buying a home, you may have heard some stats about the housing market this year, and you have some questions.
The real estate market is looking at what is called a seller’s market. That’s when inventory is low and pricing is creeping up because of heavy competition. There are often multiple offers on a single home, and homes fall under contract within days and even hours of coming on the market. Just because it’s a seller’s market doesn’t mean you should wait on that dream home. EPM is here with the hot takes on how to handle a seller’s market as a homebuyer.
But First: Why you shouldn’t wait to purchase until the markets change.
Mortgage rates are still trending downward today, which means that interest payment will be lower from the start and your mortgage will be more affordable. That leaves more available for taxes, insurance, fees, emergencies, and other costs that some new homeowners don’t think about. Interest rates won’t stay low forever, and the more you pay in interest, the higher your mortgage.
There are many other reasons why it might be a good time for you to be purchasing a home right now. Maybe you are in an area where rent costs would be comparable to mortgage costs and it makes sense to make a longer-term investment that can build your wealth. Maybe you are expanding your family and/or ready to have more stability and control over your home by becoming an owner.
A lot of first-time homebuyers think they can wait out the seller’s market for prices to come back down, but the truth is, statistically, you may never get a chance to buy that home at the price you could get it for today. With value appreciation, the house you are looking at today may be worth much more down the road.
There’s no reason you can’t find a great home to fit your needs this year. And with our help, you can walk in prepared and knowing what steps you need to take to increase your chances of success.
Steps to Homeowner Success in a Buyer’s Market
1. Work with trusted professionals
Not only should you work with lenders who can help educate you on your options and opportunities, but you must work with a buyer’s agent who is a seasoned professional who knows how to navigate these waters and give you good advice.
2. Get pre-approved for a loan
Have all your financial ducks in a row BEFORE you go home shopping. You’re going to need to act quickly in this market, and a lot of your success will depend on being extremely prepared and knowing your buying power and limits. That way, you are ready to make a speedy and well-informed offer when the time is right.
3. Focus on accuracy and efficiency
This is a high-stakes process, and beyond preparation, you need to move forward with great attention to detail to make sure the ball doesn’t get dropped along the way and you lose the house. Your seller needs to see you as extremely serious and dedicated. If there are inaccuracies and timelines you fail to meet, the deal could fall through. Your team at EPM can expertly guide you through this process, but you’re ultimately going to need to be ready to respond when things need to be disclosed.
4. Knowledge is Power
Do your research on the area you are looking to move into. Understand the comparable homes and be ready to make an offer above the asking price. Make sure you are getting advice from actual real estate professionals and not just internet home buying sites.
5. Be willing to work with your seller
You may make an offer on a home that appraises for lower than the asking price. If that’s the case, you may be able to negotiate the price down some, or the seller may expect you to cover the difference. Whatever the case, be prepared to make some compromises
6. Write that Offer!
Competition is steep. And many buyers are feeling frustrated right now because they’re putting offers on homes that are getting rejected again and again. But the reality is most buyers are going through this, and you can guarantee you won’t get the home if you don’t write an offer. Still, if you are willing to face your competition, you could end up making the leading offer and making an amazing investment in your future…
7. Competition can be a good thing for buyers
Think of it this way, if you’re competing over a house, that means lots of people want it. So the likelihood of people still wanting it when you are ready to sell is much higher than that fixer-upper that has no competing offers and could end up costing you more in repairs. You want lasting value out of your home, and when you see many buyers chomping at the bit to get into a home, that is a clear indicator that you could be looking at an ideal home to invest in.
EPM is all about empowering and educating first-time home buyers so they can go into the process confidently, prepared to make a great investment in their future. To learn more about this post or any other information shared on our blog, contact a mortgage expert at EPM today.