What First-Time House Hunters Need to Know About Buying During a Seller’s Market
What First-Time House Hunters Need to Know About Buying During a Seller’s Market
Homeownership is a dream for many people, and with mortgage rates at historic lows, this dream is now more achievable than ever. Buying a home during a seller’s market is possible, but you’ll want to proceed with a little more caution. Below, find out what you need to think about and what steps you should take if you’re planning on buying a home or investment property.
Gauge Your Readiness
Owning a home or investment property can be fun, but it’s also a lot of work. Many first-time homeowners only realize just how much work is involved and how expensive homeownership is after they’ve closed the deal and settled in. You can avoid getting yourself into this situation by checking out a first home guide and doing your homework ahead of time.
For example, before getting your first home loan, it helps to ask yourself if your credit score is in good shape and whether you have a steady source of income that will stay the same or increase over time. It’s hard to predict whether your job will be affected, but it’s something you will want to consider so you can continue to cover your mortgage regardless of what happens in the future.
Furthermore, you’ll need to consider whether you’re willing to settle in one place for at least a few years, and whether you are capable of handling all the maintenance involved. If you aren’t that handy, you’ll need room in your budget for hiring a pro to do occasional repairs.
Create a Budget and Stick to It
If you’ve decided that you’re financially and emotionally ready for homeownership, the next step is to create a budget and set a price range for your search. You can get a general idea of your price range by using an online mortgage calculator, but for a more accurate picture, it doesn’t hurt to apply for mortgage preapproval.
Upon being pre approved, you will know how much you can afford to spend each month on a mortgage. As you start looking for homes, you can limit your search to those that fall within your ideal price range.
You don’t necessarily want to buy a house at the very top of your range just because you can afford it. It’s important to remember that the costs of homeownership add up, and you risk putting yourself under unnecessary financial strain if your mortgage eats up too much of your budget. With so many unknowns during a recession, buying a conservatively priced home will likely give you more peace of mind.
Prepare for Competition
As you begin your search, you may discover that there are fewer options than you anticipated. According to HousingWire, there’s currently a historically low inventory of houses, partially due to the pandemic, and partially because of trends that started before the pandemic. What this means is that you might face more competition as you start bidding on homes.
Crafting a good offer is always important, but in a seller’s market, you might have to get more creative to stand out. You can improve your chances by submitting a preapproval letter, waiving contingencies or offering to be flexible with closing dates.
Hire a Realtor
When buying your first house — especially in a competitive market — it usually helps to have a real estate agent. Not only will a skilled agent like Carol Gilles help you find what you’re looking for, she will also help you find solutions for your concerns. Additionally, an agent can give you more perspective on how to purchase a home.
Buying a house during a seller’s market may sound like a bad idea, but that’s not necessarily the case. If you budget carefully, work with an agent and think critically about your readiness for homeownership, you can avoid any pitfalls.
Interested in purchasing a new home? Carol Gilles has the expertise to handle all your real estate needs! Call 310-864-9738 or submit this form.
Thank you to Natalie Jones – Homeownerbliss.info
In her 40+ years, Carol Gilles, of The RealEstate Group, has helped hundreds of first-time buyers move to a place called HOME. Call Carol at 310-864-9738 and find out how she can assist you in becoming a homeowner!