With spring finally here for most of the nation, prospective homebuyers can look at houses and condos without traipsing through snow and ice. Better weather, plus the traditional belief that families search for homes so they can move in between school years, makes spring a major homebuying season in much of the country.
The biggest challenge facing homebuyers in many markets may be finding a home to buy. Our market is a seller’s market. A seller’s market means that buyers have to be smart and prepared if they want to get the right house at the right price. Agents suggest that prospective buyers start by looking online at homes.
A desirable listing may be sold in days or hours, meaning there is no time to organize financing or mull over preferred features before making an offer.
Here are 10 tips for buying a home this spring:
Get mortgage pre-qualification or, even better, pre-approval before you start shopping. This helps you know what you can afford and makes your offer much stronger in the eyes of a seller. In a competitive situation you may even consider waiving the mortgage contingency clause, which is something you want to avoid unless you are sure you can get the loan. Sometimes it’s even advisable to see if you can go in without a financial contingency. Today’s market in certain areas is dominated by cash.” Expect to provide lots of documentation to get a mortgage. The more you provide upfront, the more ironclad your pre-approval will be.
Find a good agent. Using a real estate agent costs buyers nothing because the seller pays the real estate commission. Ask friends, family and co-workers for referrals. Look for a full-time agent who works often in the neighborhoods where you’re looking. You may want to interview several agents to find a good fit. If you can only look for homes on weekends, for example, you don’t want an agent who takes weekends off.
Do your research. Use the internet and apps from major portals such as Zillow and Trulia to research neighborhoods and asking prices for the type of home you want. But you should keep in mind that you’re not always getting a complete picture.
Expect to provide lots of documentation to get a mortgage. Since the recession, mortgage lenders have become much stricter about documentation, income verification and other paperwork. Well-qualified buyers can still get a mortgage, with rates for 30-year loans at 3.625 percent last week. Borrowing has become much, much more difficult; it has become a much more cumbersome process.
Separate your needs from your wants. In a competitive market, most buyers find they have to compromise on location, amenities or condition of home. It’s easier to make a choice when you know going in which features you must have and which you’d like to have but can live without. Be flexible and be prepared to compromise.
Be ready to move fast. A well-located house in good condition and priced right will sell quickly, sometimes the first day it goes on the market. You need to be ready to make a decision when you find a home you like. “You have to be prepared to act fast because we’re seeing bidding wars,” Tirtza Beer of Realty Teams says. “If they don’t know what they want, the property is going to be gone.”
The days of getting a house at a steep discount are long gone. That doesn’t mean you can’t ever get a good deal on a house that needs work, is in a less-popular location or otherwise is in less demand. But in a seller’s market there is usually very little negotiating room on price.
Understand that no house is perfect. Making your offer contingent on a home inspection is a good move, but all homes have small defects. Many sellers won’t fix anything, and there is no reason for them to if there is a backup offer waiting if you walk away. “You can’t nitpick a house,” Tirtza says. “It is a used house.”
Find a way to sweeten your offer. Most buyers can’t pay all cash, but there are ways beyond price to make your offer more attractive to a seller. Have your agent ask the seller’s agent if he would like a faster or slower closing, possibly waiving mortgage contingencies or inspections. (I don’t suggest this for everybody.)
Keep in mind this is a huge investment. While most buyers may have to compromise on some of the features they wanted, they shouldn’t settle for a home they don’t like. If you don’t find the right home this year, maybe you should rent and try again later rather than make a purchase you’ll regret.
Yael Ishakis, NMLS ID# 9879, has been helping families finance their homes for over 17 years. Yael is the branch manager at FM Home Loans located on 568 Cedar Lane and can be reached at 201-808-5345. Yael is an avid reader and a mother of five, and loves being busy all the time.
By Yael Ishakis
