If you are planning to purchase a home this year, it would be the best time to do so. The Fed has yet to decide on a timetable for raising interest rates and although mortgages are gradually rising, the rates remain more affordable.
However, finding a home in today’s market remains challenging considering that the housing supply has reached its lowest level across the country. You may have gained a significant amount of home equity, but it still matters to know how you can find a home you love amid high competition and rising real estate prices. Here are five tips to keep in mind:
1. Obtain a pre-approval letter
In today’s market, speed is everything. Homes are selling as soon as they get listed. Right now, buyers are aggressive, and they are more than willing to purchase above asking prices. If you can’t afford to raise your offer, you can always get the upper hand by going through the pre-approval process. Not only does this help you determine the type and size of the loan you qualify for, but it also lets a seller know that you are serious with purchasing. Getting pre-approved shows your financial readiness to move in.
2. Look for markets you can afford
Aside from buying bigger homes, other people want to take this opportunity to downsize. Tapping your equity so you can move into a smaller home in another state or city would make sense if you are looking to retire or if you want to cut your living expenses. You just need to take your time in finding a neighborhood that meets your needs and won’t cost a lot to live in. Then again, you may have to prepare for a long-distance move. As you look for a new home in another state, you should also determine who are the best cross country moving companies to hire.
3. Get an experienced realtor
In today’s market, you won’t go far without a real estate professional by your side. Bidding wars have become frequent across major metros. Without proper advice, you could end up losing your dream home to another buyer or end up paying a closing price you can’t afford in the long run. With a real estate agent, you can lock in on the best neighborhoods where you could find your dream home. In addition, your agent can negotiate a good price on your behalf and close a deal that falls in your favor. Be sure to look for a real estate agent that has knowledge of the local market.
4. Don’t get rid of the home inspection contingency
A contingency is a condition that the seller has to meet prior to closing. This helps protect the buyer from issues that could complicate the process of moving in. However, in today’s real estate market, buyers are getting rid of all sorts of contingencies to make their offers stand out. While you could do the same, it’s still important to retain the home inspection contingency no matter how intense the competition gets. The least you could do is to move into a home that has structural defects you will have to pay out of pocket to repair.
A home inspection contingency allows you to uncover these issues and get the seller to fix them or reduce the final price of the house. This contingency helps you make the most out of your purchase by avoiding hefty repair costs.
Today’s real estate market is challenging for many homebuyers, but it’s still possible to find a good deal even though there are fewer listings to go around. You just need to be persistent in your search.
