First-time home buyers have to process a lot of information very quickly, including plenty of jargon. If you’re looking for a home, you’ve likely heard the terms “buyers’ market” and “sellers’ market.” But do you know what these terms mean or how they may affect your home search?
In a buyers’ market there is an ample number of homes available, with few parties stepping forward to buy them. When the economy is in recession and jobs are scarce, buyers are in short supply and those looking for a house will have an advantage. On the other hand, in a sellers’ market, the demand for housing is greater than the supply. This means homeowners selling their properties will receive more offers and can ask for higher selling prices.
As Realtor.com reported, with the economy showing positive signs of recovery and housing stock relatively low, most major cities across the country are in a sellers’ market. For first-time home buyers that means increased competition and higher home prices. However, knowing how to navigate this type of home-buying situation can help you to secure the house you want at a fair price. Here are a few tips:
Work With an Agent
According to Trulia, some crazy things can happen when inventory is low and demand is high. You might find yourself wasting time viewing homes that don’t match their listing description or see properties sell mere hours after being listed. Trulia suggested that working with an experienced real estate agent who stays on top of the latest offerings can save you a lot of time and frustration. A good broker will scout out potential places for you and may even find out about homes before they are listed for the general public.
Consider the Off Season
As The National Association of Realtors noted, 85 percent of potential first-time home buyers said they will begin their home shopping in the spring or summer. Spring is the most popular season for buying a new home, but if you’re looking at the same time as everyone else, you’ll face increased competition. However, that doesn’t mean you need to put off your home search until fall or winter. In fact, the NAR suggests you should begin right away, but don’t get frustrated if your first few attempts don’t work out. Be prepared that in a sellers’ market, you may not be able to close until the competition dies down.
Be Prepared
One of the best things you can do in a competitive market is show a seller you’re a serious buyer who is ready to close quickly. As The Washington Post reported, you can do this by visiting your loan officer and getting a mortgage pre-approval letter. Visiting your lender before you find a home can also help you to fine-tune your search. The pre-approval process will help you determine the exact price range you can afford.
At The Federal Savings Bank, we understand the importance of owning your own home. Visit our mortgage bankers today to learn more about the pre-approval process and give yourself an advantage in a competitive housing market.
By Michael Adler
Michael Adler is a Senior VP at The Federal Savings Bank and recently opened up the bank’s new Teaneck office. His office is located at 206 W. Englewood Avenue. He can be reached at 201-225-9301 or via email at: [email protected]. You can look him up at: www.thefederalsavingsbank.com/meyeradler – NMLS#28172
