Right now, the market under $300,000…maybe under $350,000 is cray. Homes are selling immediately if they are decent and priced right. There are so few listings, and so many buyers, we are in a very serious seller’s market for the lower priced homes. Not that I really think $350,000 is a low priced home. Anyway, a seller’s market is of course great when you are a SELLER, but as a buyer…it sucks. You have to watch the market like a hawk, try to see a house as soon as it comes on the market, and if you like it, you have to be ready to make an offer. This is a stressful situation for sure…you don’t have the luxury of “sleeping on it” or bringing your family members by to get their opinions. (Might be for the better anyway) Often only one of a couple can actually see the house before the jump has to occur.
As an agent I try to prepare buyers when the market was like this. Often though, I don’t really get through to them until they have LOST a home, or sometimes two. Believe me, you don’t want to lose a home in this kind of market if you can help it. Especially a good home. Buyers can make mistakes though, that will cause sellers to go with another buyer…or buyers can feel panicked and make mistakes they will regret even if they DO get the house. Both are bad. Keep reading so YOU don’t make these mistakes.
BE READY. By that I mean be ready completely . You must have your pre qualification completely filled out. You MUST have gotten the lender all of your important documents. Yes…you may have a pre qualification, but if it says the lender only pulled your credit…then really it is worthless. Not all listing agents will notice this, but most will. So get the lender everything BEFORE you start looking. Your pay stubs, your taxes, your W2’s…whatever they say. Also, be ready to put down your earnest money. There is no set amount for this, but most listing agents will like to see at least 1% of the purchase price of the house. Have that available. If you need to borrow that amount, talk to the lender…and follow their directions on how to borrow that money so it won’t mess up the loan. Do all of this BEFORE you start shopping. If you don’t, it could cost you your dream house. That is not fun…and I understand doing the stuff for financing isn’t fun either. But if you do it up front, then house shopping can be super fun!
KNOW WHAT YOU WANT Take some time really going through what you want before you buy. Talk to the lender about monthly payments. Know what your TOTAL payment will look like…not just using the mortgage calculator online. Those often don’t have PMI (private mortgage insurance) included, and if you are putting down less than 20% of the home’s value, you will have PMI in your payment. Know what your payment will look like with property tax and HOA included. Make sure you are really comfortable with that number, even if you are approved for more. Also, know WHERE you want to be, and what type of house. In a frenzied market like we are experiencing you might get swept up in the craziness and not have firm boundaries…thinking any house will be wonderful. I’m here to tell you it won’t be. Not if it is too far from the highway, or work. Not if the payment makes you house poor, not if you have bad knees and you buy a two story…not if there are annoying kids on a trampoline that talk to you every time you are in your backyard trying to garden in peace. Don’t buy an adverse situation that will be difficult to sell, and you might find annoying while you live there. Just because the market is crazy today, it might not be when you are ready to sell. Don’t widen your parameters more than what you really want. You’re buying your home. Choose wisely.
KNOW THAT COSMETICS CAN BE CHANGED. You can buy an ugly house. I know it isn’t as fun at first. But updating a home in YOUR taste and style can be super fun! I am working with clients now that have the cash to pay all of their own closing costs, but they got the seller to pay some of them so they could use that cash for a few upgrades they want before they move in. Like new carpet, new window blinds, and new bathroom faucets. They hope to replace the kitchen counter tops in a year or so, but just the kitchen faucet will make the home livable. They love the floor plan, they LOVE the location, and being right next to the park will be perfect for their two year old. Don’t be too picky about the things that can be changed. If you are in a tight market, you might lose the perfect house just because you don’t love the green walls and you want grass in the backyard, not desert landscaping.
You can find your perfect next home even in a crazy seller’s market. Just make sure you are ready for the craziness, and make sure your real estate agent is on the same page as you are, and you have communicated exactly what your ‘must haves’ and ‘would be nice’s’ to them. Also, let them know you are ready…sometimes we come across a listing before it hits the market. If we know it is perfect for you, we will jump to make it yours without the fight! Do the work, and you will soon be in your dream home!