Finding that new home in today's environment comes with some tough challenges. Homes are being snatched up more quickly, and the selling prices have skyrocketed.
The supply chain crisis has made updating and remodeling old homes a challenge, causing many to look for already finished homes. There's a higher demand than there is a supply of quality homes.
At the healthiest times, shopping for a new home in a competitive market is stressful. Now that things are moving faster, and in shorter supply, it can be even more stressful.
Don't let your emotions get out of line. Move quickly and creatively, but don't rush things. You could overlook costly issues and end up overpaying for a home or settling for a home you regret later.
Treat buying a home like a second job. You may have to act quickly to view a home once it hits the listings, and you need to be prepared to make a decision on it quickly.
Don't give up if you miss a home or get outbidded. Just keep looking and bidding.
In today's market, you may not have time to make an offer and get that house by bidding in increments. The next person willing to match the asking price comes along too quickly now.
There was a time when you could scout for a house that matched everything your heart desired and find it. Today's market isn't easy to navigate with such strict expectations from the buyer.
If you have a low down payment loan approved, you may find it difficult to get a home right now. To overcome this, you need a Realtor willing to do more. With an agent who can access unlisted homes and who is ready to dig deep to find you a home, you can get one on your terms.
Understanding exactly what you're able to do will help save you time and inconvenience later on. If you're seeking a home in an area where realtors won't even consider working with buyers who aren't pre-approved, you've overcome this obstacle to finding your home.
When you get pre-approved, pay close attention to your lender's down payment terms. You may need to get private mortgage insurance as part of the terms.
Note: Make sure you get a pre-approval and not a pre-qualification. They're two different things.
You may have better chances of finding your perfect home if you're willing to mold a home with a few flaws into what you desire. This is important if you're set on living within a specific neighborhood. Perhaps buying that home that needs a little work isn't such a bad idea after all.
What are your must-haves? Can that less-than-ideal kitchen become ideal with just a few appliance upgrades? Are you willing to give up the requirement for two bathrooms and settle for one and a half instead?
Is that backyard too cluttered? With a bit of elbow grease and ingenuity, you may be able to mold it into a backyard you'll love.
Is the bathroom wall decorated with wild, ugly wallpaper? With a little scraping and some paint, you could make this bathroom shine.
Puky green carpeting in that room? It can be replaced.
Does the roof need some work? Maybe it's worth your time and investment to take care of it. (Have it inspected first, though.)
If you're willing to dig in and do some remodel work for an imperfect home, you may end up with a better home than what you originally wanted. As a bonus, your upgrades will add value to the house after buying it.
Just be realistic about your abilities and know your DIY limits. You'll have to know which jobs you can do yourself and which ones you'll incur an extra expense for because you'll need a professional.
Before you commit to a home that you'll need to renovate or upgrade, find out if an HOA or other type of association exists. Your realtor will have access to this information.
Whatever you decide—whether it's buying a finished house that's perfect to start with or making one your perfect home with some work—make sure you pay for a home inspection. They're worth the investment and will flag problems you may not otherwise see.
If you need radon, sewer, or chimney inspections, make sure you request those when you schedule your home inspection. Your inspector will likely need to get the monitors or cable camera reserved.
Attend the home inspection and be part of the process with your home inspector. You'll learn as much as possible about the house. Your inspector will help you assess the very expensive repairs without the cosmetic blemishes clouding your buying judgment.
You may be tempted to skip the inspection, but it's strongly recommended that you do not skip it.
Typically homes get more expensive the further away from a city center. Widen your acceptable location area for homes that may still be a short commute or close to public transportation.
Look at areas you know well. Get to know the neighborhoods you'll consider living in and not only just drive through them but walk the streets and chat with the people you meet outside. You'll learn more about what it's like to live there.
Work from home? Even better. You have a world of possibilities to consider. Even a country home can save you a lot of money while being close enough to visit your favorite coffee shop when you need to change your work environment for a day.
An ideal location to work from home will have:
Not all homes appreciate over time. Decide now if this is important to you and speak to your real estate agent and other knowledgeable people on what to expect.
As you check out the neighborhood and area around your house, try to imagine what's happening now and what will happen in the future. Look for signs of expansion, especially if it's near a busy road or surrounded by a lot of open space.
If there are several homes in the neighborhood, find out if they're selling quickly and who's moving in. Supplement what details you can get with what-if situations and decide how you feel living with them.
Mortgage rates aren't expected to fall below 5% again anytime soon, so many buyers are seeking to lock in their rates now. This also means it's still a more competitive market than before out there.
The competition is really active right now.
The first thing to do is to get the right real estate agent. Choose a highly recommended and knowledgeable agent.
Keeping the process as simple as possible will help you make an informed decision when you find the right house. Have your lender break down your ability to offer more than you initially thought and still stay close to your projected monthly payment. Understand what you can offer before you start shopping.
Consider an escalation clause. Make it so your bid can "escalate" to a higher number if someone outbids you. (Don't forget to make your absolute limit clear, so bids don't go beyond what you can offer.)
Can you make an all-cash offer? You'll have the upper hand in winning against other offers. Check with companies that offer all-cash offer loans to see if you qualify.
Write to the seller personally. Let the seller know who you are and what it means to you to buy the house they're selling.
Sometimes you can purchase these at below-market prices and bring them up to above-market values. If you have experience in this or help from someone who is, you may come out ahead in the long run on your investment.
With the current supply chain crisis, allow yourself more time to reach the final version of this house that you'll live in or ultimately resell. Also, make sure to talk to your suppliers and professionals to discuss unexpected rises in expenses.
While this is an alternative, it may not be a wise choice in your area. Supply prices are still extreme enough that you risk finding yourself upside down on your mortgage when your house is complete.
Establishing a shared mortgage with someone who agrees to be a co-borrower or co-signer may be an option, but get a lawyer to help you with the paperwork.
Shop for a home that's less than what you're approved for. Avoid maxing out your budget and leave some room for needs beyond the mortgage itself.
Limit your search to the homes you really want to live in. Stay true to your must-haves and know how far you can vary from them. Do not consider homes that are in areas you really dislike or have distasteful attributes you cannot fix.
With a bit of forethought and creative thinking, you’ll find the home you’re looking for. Happy hunting!