If you’re feeling overwhelmed by the current market, you are not alone. The power is in the seller’s hands which can leave many feeling discouraged during the buying process. There is a house out there waiting for you, I promise. It may take a bit of flexibility and patience, but together we can get it done! Here are some tips to help prepare first-time homebuyers for the experience.
Understand the Current Market (make sure you are ready to buy!)
You might already be past this point in the homebuying process, but it is worth it to take a good look at the current housing market and not be too hasty with any decisions. Buying your first house is a very personal decision, and only you can decide if the time is right! Although you cannot predict or try to perfectly time the purchase in any market, be sure to have a basic understanding of what the real estate market looks like in your specific area. Start attending open houses and comparing home amenities to prices to gain some knowledge of what to expect. This will help keep your expectations reasonable, giving you an advantage over other buyers.
Know What You Can Afford
First and foremost, get preapproved by a local mortgage lender or a mortgage broker to see what you can qualify for. There are also plenty of resources out there to help you understand what type of home you can afford, but be sure to have a very solid sense of this before beginning your search. The Washington Post describes the four key components of affordability as:
- How much you have saved for a down payment
- How much your household earns
- What debt you carry
- Your credit score
Though the market is beginning to shift-interests are on the rise. Inventory levels are also starting to increase, but the market remains brisk and in certain markets, offers are still coming in fast and over asking.
To find success in this market, I recommend finding a property that is below your budget and submitting an offer over the asking price. An offer above asking will immediately help you stand out against other competitive buyers and show the sellers you are committed and genuinely interested in their home.
Other Expenses to Remember
Knowing how much you can afford in terms of a house is a great start, but you have to remember the many other expenses that come with the purchase. When investing in a house, a home inspection can be an invaluable tool that may save you a lot of money and stress down the line. Whether you choose not to have an inspection done or not, you should have money saved for potential future repairs to your home. They may need to be done sooner than you think! Be sure to familiarize yourself with average closing costs so that you are not surprised by extra fees once you have found your perfect house. Similarly, you should have extra money set aside for moving costs, which can really add up if you are moving long distance.
Solidify your Wants and Needs
If you have a long list of must-haves it might be time to zero in on what is most important to you. In most markets, it can be tricky to find a home that checks every single box on your list. However, there are still homes that are just what you need. Narrow your list down to two or three must-haves that are the most important to you. Things like size, layout, number of bedrooms, and bathrooms should be at the top of your list, while smaller items that can be altered later like granite countertops and special appliances should be near the bottom.
Find the Right Realtor
The process of home buying can be stressful- but it can also be fantastic and exciting to look for your new home! Be sure to work with a Realtor who shares your enthusiasm for the process, they can make all the difference in getting you into the home of your dreams. Not all agents are created equal- especially in a competitive seller’s market. Working with a professional with years of experience can help ease your mind. In particular, you should be looking for someone with many positive reviews, a proven track record, and plenty of knowledge about the area.