When you're in a seller's market, buying a home can sometimes feel impossible. There are a host of factors that—especially if you're a first time home buyer—can feel overwhelming and make you question whether or not you'll ever find the right home for you and your family. Fear not! While the real estate market is volatile and subject to turn on a dime, real estate professionals like The Bell Team make it their business to know where to turn your focus in order to land the right home no matter how difficult the market. For when you're buying in a seller's market, here are six principles to help you make it through on the other end unscathed.
First, it's important to have a good handle on your current situation before you march into the market. Have a steady knowledge of the current mortgage rates, average down payments, and a contextual understanding of home rates now versus where they used to be. For instance, while paying 4.5 % interest on a 30-year fixed mortgage may sound painful, remember that that's nearly half rate in pre-recession 2007.
Next, make sure your own affairs are in order. Clean up your credit score, be preapproved for a mortgage, and make yourself a more powerful negotiator by offering a higher down payment, escalation clause (promise that you’ll pay X amount over other offers up to a ceiling), or a truncated closing schedule. And here’s a surprising stat: nearly 25% of home buyers last year paid for their home with a gift from family or friends.
Of course, paying cash is an option and, while generally advantageous, may or may not be the best option depending on your situation. If you want to know more, we’ve got a post on that, too!
It can also be helpful to reach out for help, especially if you’re a first time home buyer. Take advantage of classes available to familiarize yourself with the jargon and current market trends. And, last but certainly not least, a good real estate agent will do all of that for you as well! Not only will they teach you about your local market, but they will be there for the entire process, ready and willing to answer questions you might have. While the market may seem foreboding to you, real estate agents are in the trenches every day and as such are well prepared to hold your hand through the chaos.
It’s also important to familiarize yourself with the tax situation you’ll be putting yourself in. Over the past few years, there are significantly fewer tax breaks for home buyers, but that doesn’t mean that all hope is lost. Again, an experienced real estate agent (who more likely than not owns a home nearby and has met the same challenges you’re facing right now) can make all the difference and can make you feel more secure in the market.
Now that you exactly how cattycornered the market is, you’ve gotta treat looking for a home like a full time job: look often and hard, and when you find a place that seems right, jump on it quick. Even if you don’t find a home right away, continue to save because, if current trends are to be believed, homes will only appreciate from here. Remember to stay focused, and look at your home as a practicality. The real estate market has its ups and downs, so making a prudent choice now can and will save you heartache in the long run.
Sure, the market may sound like a scary place to be right now, but that’s what we’re here for! The Bell Team are here to ensure that you’re put at ease during the home buying process. We’ve seen a thing or two since starting our business and have been under the tutelage of the nation’s number one real estate company, so we’re ready to tackle whatever concerns you might bring to the table.