It can seem bleak with historic low amounts of housing inventory, but I promise it is still a good time to buy a home. To navigate the summer market and get you in your new home, here are a few key suggestions:
1. Find the right REALTOR®. Always the best first step. I always say REALTORS® are the team captain of the transaction [insert your favorite sport here]. There are many people on the team who make the win happen, but the captain keeps everything moving forward whether they personally handle the task or empower a team member to do it. In this competitive market, having a professional available to help you is imperative.
2. Listen to your REALTOR®. If, as a buyer you are employing someone to advocate on your behalf, then please trust the advice given. I always tell my clients we are a team — my job is to share my expertise and experience to empower them to make the best decision. When a buyer goes rogue, that is when it can be a less than ideal experience. And the only person who dislikes that more than the buyer is the REALTOR®. We desire to have happy clients, every time!
3. Pre-approval first please. I know viewing the houses is the fun part, but who goes shopping and doesn’t know the bank balance? No one! I mean, maybe you don’t know the exact amount to the penny, but you have an idea. Because who wants to fall in love with an outfit, food or even a vehicle, only to find out that shopping venture should have been in a different price range? Even more important in this market: when you find “the one,” you don’t necessarily have a few days to then go get the pre-approval.
4. Delaying may only hurt you. Some buyers or prospective buyers want to wait a few months because interest rates have recently increased. Or they are waiting for all the foreclosures to roll in so they can “snag” a deal. All trends indicate that prices are still increasing, interest rates may see at least two increases before the end of 2022, and while we have seen some foreclosures, I can count them on one hand. A bit of an exaggeration of that last part, but the number of foreclosures has not hit pre-pandemic levels. As bleak as things may look now, the data indicates now is still a good time to buy.
5. Prep a strategy with your REALTOR®. You must strategize in this market. You can broaden your search parameters. Or be open to properties that need a bit of cosmetic work. Your REALTOR® is immersed in this market to provide data and experience to the conversation to help negotiate and find hidden opportunities.
6. Do not make any large purchases. Lenders everywhere want to cry when you “notify” them you just purchased that amazing appliance package for the new house right after you got under contract. Little known fact, but most lenders are checking your credit right before settlement, and vast changes may affect your credit score, reserve balance and affect the approval of your loan. When in doubt, just ask your lender before making drastic financial changes during the approval process.
7. Be flexible. We start with your wish list, but sometimes when competition is so high, you might need to concede on some terms. Do you have to have a third full bathroom? Maybe you are open to a different city with a similar commute. Can you adjust the closing date to accommodate the seller relocating to the new home? All these flexible adjustments impact terms in the contract and may determine whether your offer wins.
8. Decide wisely. Every transaction does not have to be thousands over list price and without a home inspection. It goes back to #5 — discuss strategy with your REALTOR® up front, but also per property. I have recently had some success for buyers to be the winning bid with a home inspection contingency and without an escalation addendum. And speaking of home inspections, if you waive the contingency during the sale, please get a home inspection after settlement so at least you have the knowledge and can address any issues early.
9. Do not celebrate until you get the keys. Under contract is the first step of many, and there are 1,001 things that can go wrong. That’s why you have your REALTOR®. I promise I am a positive person, and I will give you the biggest hug once we close but let us take it one step at a time.
10. Once you close on the house, celebrate BIG! When you make it this far, you deserve to dance your dance, sing a little song and indulge in ALL the cake! Purchasing a home is quite an accomplishment in this market.
Be encouraged; your new home is out there!
Kaera Mims is an associate broker, REALTOR® and success coach with Abbitt Realty in the Oyster Point corporate offices. She can be reached at 757-223-7478 or Kaera@abbitt.com and on social media @KaeraMimsRealtor.