Buying a Home for the First Time? Avoid These Mistakes

Buying a home, especially if you’re a first-time home buyer, can be daunting and nerve racking.

But it does not have to be. LendingTree’s online loan marketplace has got you covered – at least when it comes to getting a mortgage.

A 2016 study by the Office of Research of the Bureau of Consumer Financial Protection reveals that prospective buyers who shop for a mortgage when buying a home for the first time report “increases consumers’ knowledge of the mortgage market and increases consumers’ self confidence in their ability to deal with mortgage related issues.”

The importance of shopping for a mortgage as a first-time home buyer is that it saves you money in the long term and “reduces the cost of consumers’ mortgages,” the study found.

The home-buying process can be intimidating. So being aware of these mistakes when buying a home for the first time can help you save thousands and thousands of dollars in the long term.

10 Mistakes to avoid when buying a home for the first time.

1. Not knowing your credit score.

We are all aware that the higher your credit score, the better.
Yet, despite this fact, many people fail to check their credit score before
buying their first home.

And a low credit score can lead to a high interest mortgage loan, or even worse, a loan rejection. Given the fact that your credit score is the number 1 item mortgage lender looks at, it pays off to know where you stand.

Credit Sesame will let you know what your credit score is for free and monitor it for you. It will also offer tips on how to raise your credit score and reduce your debt.

Just sign up for a free account – it only takes 90 seconds.

Mortgage rates and fees vary across lenders. In other words, two applicants with the identical credentials can get different mortgage rates. Despite this, however, many fist-time homebuyers fail to shop and compare mortgage rates before buying their first home.

The study reveals that 30 percent first time homebuyers do not
compare and shop for their mortgages, and more than 75 percent reported
applying for a mortgage with only one mortgage lender.

The study further reveals that “failing to comparison shop for a
mortgage costs the average homebuyer approximately $300 per year and many thousands
of dollars over the life of the loan.”

An easy way to shop and compare for a mortgage is with LendingTree. Their simple and straightforward platform can help you find and apply for the right loan all in one place.

3. Sticking with the first mortgage lender you meet.

While it’s tempting to work with your local mortgage lender who’s
only a few blocks away from your home, this decision requires more time. Take
time to meet with at least three mortgage lenders before picking the best match
for you.

Fortunately, LendingTree free online platform, allows you to quickly browse several mortgage rates with several mortgage lenders without visiting a dozen bank branches.

4. Not knowing what loans are available to you.

If you’re buying a home for the first time, one thing you need to address is what types of loans are available to me. Sometimes the answer to this can be quite simple: conventional loan. This is because most people know about this type of loan.

But conventional loan requires at least 20% down payment. And the credit score needs to be in the 700. *Note: You can put less than 20% down payment, but you will have to pay for a private insurance mortgage (PMI).

Sometimes it’s not feasible to come up with that type of money as a first time home buyer. So knowing if other loans are available to you is very important.

FHA loan

One type of loan that is popular among first time home buyers is FHA loan. It is so popular because it’s easier to get qualified for it. And the down payment is very little comparing to that of a conventional loan.

For example, FHA loans require a 580 credit score and a down payment as low as 3.5% of the home purchase price. This makes it easier to qualify for a home loan when you’re on a low income.

VA loans

VA loans are another great option for first-time homebuyers. However, you have to be a veteran. Unlike a FHA or a conventional loan, VA loans require no down payment and no mortgage insurance. This can save you thousands of dollars per year.

So if you’re in market for a loan to buy your first home, you need to educate yourself about the different available loans.


Not All Mortgage Lenders Are Created Equally

When it comes to getting a mortgage, rates and fees vary. LendingTree allows you to view and compare multiple mortgage rates from multiple mortgage lenders all in one place and at the same time, so you can choose the best rates for your needs. LendingTree makes getting a loan faster, simpler, and better. Get started today >>>


5. Not getting pre-approved for a mortgage

One of the first time home buying mistakes you should avoid making is not getting a pre-approval letter. You can simply contact a lender and request it. The mortgage lender will pull your credit report to make sure you have the minimum credit score requirement.

They will also need your bank statements, W2s, recent income tax returns, pay-stubs to verify your employment and ability to afford the loan.

Why this is important? A pre-approval letter means that you’re a serious buyer. It signals that you’re able to commit to the house once an offer has been accepted. It also makes you more desirable than the other potential buyers.

Get a Pre-Approval for a Mortgage Today

6. Not knowing how much you can afford

Buying a home is probably going to be the biggest expenses you’ve ever made. But buying a house you cannot afford can lead to financial trouble along the road. Paying an expensive mortgage for 15 to 30 years on a low income can be hard.

So it pays to know how much house you can afford before you start searching for your home.

The best way to know how much house you can afford is to look at your budget. Take into account your expenses and income and other costs associated with owning a home.

7. Not knowing other upfront costs

If you think that the only cost to buying a home is a down payment, then think again. There are several upfront costs associated with owning a house. These upfront costs include private mortgage insurance, inspection costs, loan application fees, repair costs, moving costs, appraisal costs, earnest money, home association dues.

As a first time home buyer, this may come to you as a surprise. So, be ready to have enough money to cover these costs.

8. Failure to inspect your home.

Although some banks would prefer you inspect your home before they offer you a loan, it’s not mandatory. But that does not mean you shouldn’t do it. Not inspecting your home can cost you a lot. Inspection discovers defects that you may not know about. Inspection costs can be anywhere from $300 to $700.

Don’t be stingy with these costs. It’s better to find out about any hidden defects , like a faulty wiring and plumbing, than finding about them later. To avoid regretting your decision or having to spend thousand of dollars on repairs down the road, consider an inspector.

9. Failure to check out the neighborhood.

Just because the street or the neighborhood your potential house is located is quiet or is not run down doesn’t mean crime is not a problem. So before buying your home, you should check out the neighborhood. Take a trip at night to get a feeling of the environment. Talk to residents. Most importantly, check with the local police station – they can be a great resource when it comes to crime rates in a particular location. This is simply one of the first time home buying tips you shouldn’t ignore.

10. Searching for a mortgage on your own.

There are several mortgage lenders available to you. But choosing one that is right for you can be tough.

The LendingTree online platform makes it easy and simple for you to find the right home loan for you. Now you can get matched up to several mortgage lenders all in one place and at the same time. And the whole process just takes a few minutes.

Follow these steps to get matched with the right mortgage:

  1. Go to www.lendingtree.com;
  2. Answer a few questions regarding the type pf loan yo need and you’ll use it. Within a few seconds, you’ll see multiple, competing offers from several lenders;
  3. You then shop and compare offers side by side.

Ready to get started? Find your best loan!

The bottom line is when it comes to buying a home for the first time, you should not take any shortcut. Doing so can cost a lot of money down the road. So before buying your first home, make sure you get the right mortgage loan, inspect the home, and have enough money to cover some of the upfront and ongoing costs associated with owning a house.

Speak with the Right Financial Advisor

Still looking for first time home buying tips? You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

Source: growthrapidly.com

8 Upfront Costs of Buying a House

November 28, 2019 Posted By: growth-rapidly Tag: Buying a house

Looking to buy a home soon? There will be upfront costs of buying a house.

You may have found a house that you like. You may have been approved for a mortgage loan, and have your down payment ready to make an offer. If you think that, at that point, all of the hard work is over, well think again.

In addition to the down payment, which can be significant depending on the price of the property, there are plenty of upfront costs of buying a home. As a first time home buyer, this may come to you as a surprise. So, be ready to have enough cash to cover these costs. In no particular order, here are 8 common upfront costs of buying a house.

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free.

What is an upfront cost?

An upfront cost, as the name suggests and in terms of buying a house, is out of pocket money that you pay after you have made an offer on a property. They are also referred to as closing costs and cover fees such as inspection fees, taxes, appraisal, mortgage lender fees, etc. As a home buyer, these upfront costs should not come to you as a surprise.

What are the upfront costs of buying a house?

Upfront cost # 1: Private mortgage insurance cost.

If your down payment is less than 20% of the home purchase price, then your mortgage lender will charge you a PMI (private mortgage insurance). A PMI is an extra fee to your monthly mortgage payment that really protects the lender in case you default on your loan. Again, depending on the size of the loan, a PMI can be significant. So if you know you won’t have 20% or more down payment, be ready pay an extra fee in addition to your monthly mortgage payments.


LendingTree: A Better Way to Find A Mortgage

LendingTree.com is making getting a mortgage loan simpler, faster, and more accessible. Compare the best mortgage rates from multiple mortgage lenders all in one place and at the same time. LEARN MORE ON LENDINGTREE.COM >>>


Upfront cost #2: inspection costs.

Before you finalize on a house, it’s always a good idea to inspect the house for defects. In fact, in some states, it is mandatory. Lenders will simply not offer you a mortgage loan unless they see an inspection report. Even if it is not mandatory in your state, it’s always a good idea to inspect the home. The inspection cost is well worth any potential defects or damages you might encounter.

Inspection fee can cost you anywhere from $300-$500. And it is usually paid during the inspection. So consider this upfront cost into your budget.

Upfront cost # 3: loan application fees.

Some lenders may charge you a fee for applying for/processing a loan. This fee typically covers things like credit check for your credit score or appraisal.

Upfront cost # 4: repair costs.

Unless the house is perfect from the very first time you occupy it, you will need to do some repair. Depending on the condition of the house, repair or renovating costs can be quite significant. So consider saving up some money to cover some of these costs.

Upfront cost # 5: moving costs.

Depending on how far you’re moving and/or how much stuff you have, you may be up for some moving costs. Moving costs may include utilities connections, cleaning, moving

Upfront cost # 6: Appraisal costs.

Appraisal costs can be anywhere from $300-$500. Again that range depends on the location and price of the house. You usually pay that upfront cost after the inspection or before closing.

Upfront cost # 7: Earnest Money Costs

After you reach a mutual acceptance for the home, in some states, you may be required to pay an earnest money deposit. This upfront costs is usually 1% to 3% of the home purchase price. The amount you pay in earnest money, however, will be subtracted from your closing costs.

Upfront cost # 8: Home Associations Dues

If you’re buying a condo, you may have to pay homeowners association dues. Homeowners association dues cover operation and maintenance fees. And you will pay one month’s dues upfront at closing.

In conclusion, when it comes to buying a house, there are several upfront costs you will need to consider. Above are some of the most common upfront costs of buying a house.

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

MORE ARTICLES ON BUYING A HOUSE:

10 First Time Home Buyer Mistakes to Avoid

How Much House Can I afford

5 Signs You’re Better Off Renting

7 Signs You’re Ready to Buy a House

How to Save for a House


Not All Mortgage Lenders Are Created Equally

When it comes to getting a mortgage, rates and fees vary. LendingTree allows you to view and compare multiple mortgage rates from multiple mortgage lenders all in one place and at the same time, so you can choose the best rates for your needs. LendingTree makes getting a loan faster, simpler, and better. Get started today >>>

Source: growthrapidly.com

How to Save Money When You Buy a Home in Idaho

Buying a home is one of the biggest decisions a person can make. It’s the culmination of years of intense saving and budgeting, months of open houses, and weeks of late-night strategizing and offer planning.

In 2020, buying a home has gotten even harder as the COVID-19 pandemic has swept across the United States. Shopping for real estate during a crisis has always been difficult, but necessary safety measures taken to stop the spread of the virus have had a noticeable impact on how most people shop for homes.

One silver lining of this unfortunate situation is that many people in the real estate industry are finally seeing how technology makes the home buying process easier on both buyers and sellers. At Homie, we understand how technology like ours can help buyers and sellers save time and money. Let’s explore how you can leverage technology and other strategies to save money when you buy a home.

Get Your Finances in Order

If you’re thinking of buying a home, the first thing you should do is take a long, hard look at your finances. The two most important financial factors are the amount you have saved for a down payment and your debt-to-income ratio.

The down payment amount is simple. Most of us grew up thinking that 20% was standard, but that isn’t the case anymore. According to a 2017 industry survey, most homeowners only pay 7% down. Let’s all breathe a collective sigh of relief! With the average home value in Idaho rising every year, it’s a huge relief to know that you don’t have to save the full 20% down payment.

While you’re saving for the down payment, you also need to think about your debt-to-income ratio (DTI). This value compares what you make each month to what you owe. You can still buy a house if you have debt from student loans or another source, but you need to ensure your DTI is as low as possible, preferably at or below the 28% standard.

Get a Great Deal on a Loan

Once you’ve gotten your finances in order, you can start exploring mortgage rates and loans. Most people start with their bank. That’s a good start. However, they often make a critical mistake: they don’t shop around for a good rate. If you only check at your bank, you’re missing great deals from companies like Homie Loans™. They’re so confident no one else can beat their locked loan rate that they’ll give you $500 cash if you find a better deal.

Homie Loans doesn’t just give you a good rate, the entire application online, so you don’t even have to leave the house to get approved.

Explore Federal Loan Programs

In addition to shopping around for a great mortgage rate at private companies and commercial banks, you can save tons of money by checking out your options for federal home buyer programs.

These programs are designed by the government and government agencies to ease the burden of homeownership. Each program is different: some require applicants to fall into certain income thresholds, while others are designed to assist veterans or individuals looking to buy homes in rural areas.

Idaho-Specific Programs for Down Payment and Cost Assistance

In addition to exploring federal home loan programs, many state agencies in Idaho have these programs available to residents. The Department of Housing and Urban Development has state-by-state guides for homeownership assistance programs, and lists many area-specific programs throughout Idaho.

Depending on where you live, you may be able to find specific assistance for homeowners in your region. These programs may be smaller, but since they’re regional, it’s usually easier to talk to a person on the phone and get practical advice for getting started on your journey to homeownership.

Look Outside Your Area

If you’ve started your search and all of the suitable homes in your area are out of your price range, you may want to expand your search. The switch to remote work has affected many of us, making cities and other centers of work less reliably desirable. If you’re currently working remotely or have the opportunity to do so in the future, you may be able to expand your search to include larger homes in less urban areas.

Buying in a more urban location like Boise might also get easier with the rise of remote work. Since Boise is such a student-heavy town, classes and work going virtual have opened up real estate in the city. If you’re looking for a good deal on a smaller urban home or condo, this may be a good time to invest.

Leverage Technology by Buying a Home With Homie

Another great way to save money when you’re buying a home in Idaho is to use a service like Homie. Instead of paying a high percentage of the final costs, you’ll pay your Homie agent a low flat fee.

Homie also leverages technology to make the home buying process easier. The Homie family of companies makes everything that much smoother. We’ve brought everything from the mortgage to insurance under one roof, ensuring you don’t have to run all over town to get papers signed and contracts approved. It all happens through Homie.

The best part of working with a Homie agent while buying a house is the refund of up to $2,500 we send you at the end of the process. The Homie team is always here to help buyers in Idaho save money. Get in touch with us today to start your journey towards homeownership.

Get more homebuying tips!

4 Ways to Outsmart the Competition When Buying a Home
5 Tips to Help You Afford Your First Home
Common Home Buying Fears and How To Overcome Them

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Source: homie.com

Expert Homebuying Tips for Buying in a Seller’s Market

Buying a house is a big decision, but it can feel especially overwhelming to place an offer on a home less than 24 hours after seeing it for the first time. Plus you’re under pressure to outbid several other buyers — or risk losing the house.

While these circumstances might sound extraordinary, they’re not. With housing inventory nationwide at an all time-low — down 22% from last year according to the National Association of Realtors — it’s no wonder buyers are competing for the same few houses.

I was in this exact position last fall. Here are seven key takeaways from my experience buying in a seller’s market.

Get a Pre-Approval Letter

In order to be competitive in a hot seller’s market, you will need to line up your financing in advance.

Besides all the usual suspects, like saving up for a down payment and improving your credit score, you’ll also want to get a pre-approval letter from your bank. It states that a bank would approve you for a mortgage of a certain amount, and acts as a guarantee to the seller that you can actually afford to buy their house.

This is where it helps to know your budget up front.

“It’s important to understand that the strength of financing is a key consideration a seller takes into account when selecting an offer,” said real estate developer Bill Samuel.

No seller wants to risk accepting an offer that might fall through. Aand since pre-approval letters can take some time to get, have one ready before you find your dream house.

Be Friendly With Neighbors

This might sound crazy, but making a good impression on your new neighbors can actually make a difference when it comes time for a seller to review offers.

Since you’ll likely be visiting the home at least once before making an offer, be prepared to talk to any neighbors you might run into. In close-knit neighborhoods, or ones where people share resources (like an HOA), sellers might care a bit more about the type of person they sell the house to.

If you happen to meet a neighbor when visiting the home, introduce yourself and make a good impression. You never know how much their opinion of you might factor into any final decisions.

Submit an Offer Quickly

After you’ve seen a house, and decided you love it, be prepared to submit an offer quickly— as in, ASAP.

Work with your real estate agent to determine how many other offers the seller already has (or expects to get) and then be prepared to draft something up that day. In our case, we toured our home for the very first time at 11 a.m. on a Monday — it came on the market the evening before — and made an offer by 4 p.m. that same day.

If that sounds fast, it is. But by the time we submitted our offer, the seller already had three others. This is where it helps to have a great real estate agent on your side.

“Having a realtor who can get your offer submitted quickly is crucial,” said Erik Wright, owner of New Horizon Home Buyers. “You want to get your offer in front of the seller first, and make it strong. Purchase price is the obvious factor and in a competitive market, houses often go for over asking price. However, a strong offer has several factors and it depends on what’s most important to the seller.”

Work with your real estate agent to find out what matters most to the seller — is it money, closing quickly, something else entirely? Then make sure your offer addresses their needs.

Minimize Your Contingencies (Within Reason)

Another way to win over your seller (and prevail in any bidding wars) is by keeping your contingencies to a minimum.

Contingencies are the contractual stipulations buyers and sellers must meet before the deal can close. Unsurprisingly, sellers don’t like to have too many of them to deal with. Contingencies can include such things as requesting a seller to make certain repairs, getting a home inspection, or even the fact that you’ll need to sell your old house before being able to buy the new one.

“In a really aggressive seller’s market, a home buyer who has to sell a current property should do so before placing an offer on another home,” said Jason Gelios of Community Choice Realty. “Don’t always assume that the seller will take the highest price. Other conveniences can play a factor in gaining the seller’s attention, especially things like faster closing times and less restrictions.”

While my partner and I didn’t make the highest offer on our house, we did have the fewest contingencies — mainly, we didn’t ask too much of our seller in the way of repairs, or have another house to sell in order to afford the new one.

All that said, there are certain contingencies you should never forgo, and a home inspection is one of them. Getting your home inspected is hugely important, since inspectors will often find things even the sellers weren’t aware of. No matter how much you love a house, don’t be afraid of exercising your right to an inspection.

According to buyer protection laws in most states, sellers are required to report any findings in home inspections to subsequent buyers. In other words, if an inspector finds something wrong with the house, the seller will have to deal with it one way or another— either with you, or the next buyer should you choose to drop out of the deal.

Make a Generous Earnest Money Deposit

When trying to woo your seller in a competitive market, it helps to make a generous earnest money deposit. An earnest money deposit is a good-faith deposit requested by the seller when you enter into a contract to buy the house and typically run anywhere from 1% to 3% of the sale price of the home.

When deciding how much of an earnest money deposit to include in your offer, keep in mind that whatever amount you give comes off the price of the home (and is returned to you if the deal falls through). In other words, there’s no reason to be cheap. If you can, go slightly above the seller’s requested deposit amount. Even if it’s just a little more than what they’re asking, that gesture of good faith might just be what gets you the house.

A row of houses on a cul de sac in a suburban neighborhood.
Getty Images

Offer Above Asking Price

Wait. Why would anyone make an offer that’s above asking price? Because the competition did it first, and in a hot seller’s market, offering above asking price is often what it takes to even be considered.

Upping your offer may not break the bank as much as you’re fearing. “With interest rates so low these days, offering more than what the seller is asking may not make a drastic difference in your overall monthly payments,” real estate agent Pavel Khaykin of Pavel Buys Houses said.

Let’s say the listing price on your dream home is $320,000 and you’re able to put down a 6% down payment. That leaves you with a mortgage of roughly $301,000. For a 30-year fixed mortgage at an interest rate of 3%, that translates into $1,269 monthly payments. Now let’s say you decide to bid a little higher on the home and offer $10,000 over asking price. This would only bump up your monthly payment (assuming you qualify for that low interest rate) by $42.

Lace Up Your Running Shoes

In a hot seller’s market, you’ve got to be ready to move fast. Often this is more of a change in mindset than anything else. When my partner and I first started looking at homes, we considered ourselves casual buyers — that is, until our dream home came on the market late one Sunday night. From there, things moved quickly. We saw the home, made an offer, were under contract by morning, and spent the next month and a half going through the process of closing on the house.

If you’re serious about finding your dream home in the next few months, the best thing you can do is know what you want from the outset, and get your ducks in a row to make a compelling offer when you find it. Maybe this means making a list of your must-haves in a house, and working to improve your credit score. It might also mean reaching out to a real estate agent before you need one, and getting that pre-approval letter in place.

Although inventory is low, new houses come on the market all the time.

Larissa Runkle is a contributor to The Penny Hoarder.

Source: thepennyhoarder.com

These Are the Top Reasons Home Buyers Haven’t Been Successful Lately

Posted on February 1st, 2021

In case you haven’t been paying attention, the housing market is en fuego. This is actually nothing new.

It’s been pretty red hot for years now, and home prices have risen consistently for about a decade since they bottomed around 2012.

But amazingly, the housing market has become even more competitive lately, despite us being in the midst of a worldwide pandemic.

I already explained that the 2021 housing market is akin to the toilet paper shortage, with too many buyers and not enough sellers.

This is why 2021 home prices will be roughly 10% higher than they were toward the end of 2020.

It also tells me you need to bring your ‘A’ game (and then some) if you want to be successful in winning a bid on a property.

You Better Be Ready If You’re in the Market to Buy

pending sales

  • New for-sale listings fell 12% from a year ago, the largest decline since May
  • Active listings declined 35% from 2020 to reach a new all-time record low
  • 43% of homes had an accepted offer within the first 2 weeks, up from 35% a year ago
  • Last week that number hit 55%, the highest point since at least 2012 (when Redfin began tracking such data)

Just when you thought real estate was cooling off, it got even hotter. Don’t believe me? Check out the latest data from real estate brokerage Redfin.

The company noted that new for-sale listings fell 12% from a year ago, the largest decline since May.

Meanwhile, active listings, which are the total number of homes listed for sale at any point during a given period, slipped 35% from levels seen in 2020 to reach a record low.

This supply issue resulted in nearly half (43%) of homes receiving an accepted offer within the first 2 weeks on the market, up from 35% a year ago.

And that number hit a staggering 55% during the week ending January 24th, which shows it’s only accelerating.

Prospective Buyers Are No Longer in the Planning Phase

planning

In another report from the National Association of Home Builders (the Q4 Housing Trends Report), they found that 56% of prospective buyers have exited the planning stage and are now actively attempting to purchase a home.

That number is up from 43% in the fourth quarter of 2019, and reflects a climate filled with more serious buyers, as opposed to lookie loos.

The NAHB said this is being driven by a mixture of record low mortgage rates, COVID-19, and the fear of missing out (FOMO).

Remember, we’ve just entered February. The traditionally hot housing market doesn’t begin to reveal itself until March and April. I can only imagine what that will be like.

In other words, this situation is only going to get worse as 2021 rolls on, so you better be ready if and when you find a house you like because your competition will be…

FYI, don’t buy a house because you don’t want to miss out.

Why Prospective Home Buyers Aren’t Winning

missing out

  • The most common issue is being outbid on a property
  • Which replaced the inability to find an affordable home
  • Another common gripe is finding a home in a desirable neighborhood
  • Or locating a property that has the desired features/amenities

The NAHB report also looked at why prospective home buyers aren’t closing the deal, and after years of its being an affordability issue, it’s now a matter of being outbid.

While bidding wars aren’t new, and certainly ebb and flow over time, they appear to be gaining traction again.

As you can see from the chart above, there are four main issues that have kept active home buyers from landing a property.

They include housing affordability, features/amenities, desired neighborhood, and getting outbid.

For the first time in the NAHB’s series history, getting outbid was the number one reason a long-time searcher hasn’t made a home purchase.

It usurped the “inability to find an affordably-priced home,” which had long been the issue for most prospects.

Interestingly, home buyers are less burdened by affordability and more held back by higher bids from their competition.

Of course, you could argue they are somewhat one in the same, with a higher bid possibly reflecting a price that becomes too far out of reach.

However, it further illustrates just how strong the seller’s market has become yet again.

There were some periods over the past few years where buyers had the upper hand, but it appears those days are numbered, at least for the foreseeable future.

Prepare for War (of the Bidding Variety)

  • You have to be pre-approved for a home loan (no ifs, ands, or buts), you won’t even get into a showing
  • Expect to provide your “best and final” offer right off the bat
  • Don’t be surprised if you’re outbid, but also don’t expect home prices to get any cheaper this year
  • Consider properties that aren’t picture-perfect which could offer value and help you avoid a bidding war

If you’re a buyer, you need to get your ducks in a row, now more than ever.

At a minimum, this means being pre-approved for a mortgage, having assets set aside for down payment and closing costs, and being ready to make an offer at a moment’s notice.

Oh, and if you’re currently a homeowner, how to get rid of that property without it being contingent.

If you’re worried about affordability, it’s likely only going to get worse, whether it’s higher mortgage rates or even more expensive home prices.

Remember, they’re forecast to rise another 10% by November nationally. As far as interest rates go, the 2021 mortgage rate forecast calls for mostly higher rates, or flat at best.

With regard to the features/amenities issue, the NAHB noted that 41% of buyers in the fourth quarter of 2020 were considering a newly-built home, more than double the 19% share a year earlier.

Generally, new homes have all the latest features a home buyer could want, and/or they can be paid add-ons depending on the builder.

The tradeoff is typically a home in a subdivision that isn’t as centrally located, so you might get the home you want, but not the neighborhood.

If you must have the neighborhood, home renovation isn’t as daunting as it looks, assuming we’re just talking about new paint, flooring, appliances, curb appeal, etc.

Because the market is so competitive, it might be better to look at the homes that aren’t staged to perfection, but have potential.

These diamonds in the rough good could offer a discount, or at least help you avoid a bidding war.

Read more: 2021 Home Buying Tips to Help You Seal the Deal

Source: thetruthaboutmortgage.com

Home Buyer Checklist: What to Look for in an Open House

Open houses may be staged to look like a home decor dream, but don’t let that distract you from the real reason you’re there: to potentially buy a home. Make sure you can look past the neatly arranged furniture and focus solely on whether the house would be a good fit for you and your family. To help, here’s a home buyer’s checklist of things you might have missed at first glance.

Windows – Look specifically if they are facing the right direction to let sunlight in, and whether they open to a nice view (versus directly toward another neighbor’s window).

Under the Sink Cabinets – Check for possible signs of water damage due to leaky plumbing.

Electrical Outlets – Make sure there are enough outlets for the appliances and other electronics you’ll be using. If not, you can decide if that’s a renovation you’d like to make.

Storage Space – Don’t just look to see if there’s enough closet space, but look for closet placement. Also check that the storage is in a convenient location.

Appliances – If they’re included in the house, make sure they’re in good condition. They should be on and working while you’re there.

Under the Rugs – Lift up any rugs to check the condition of the floor underneath.

Floor Level – Check to see if the floors are level. Place a marble or another small, round object on the floor and see if it rolls consistently in one direction.

Attic – If the house has one, make sure it’s well insulated.

Water Spouts – Runoff from the gutters should be pointed away from the house, so take a step outside to see if this is the case.

This list isn’t all-inclusive, but it’s a good place to start. Talk to a CENTURY 21 ® agent to see what else he or she might add.

The post Home Buyer Checklist: What to Look for in an Open House first appeared on Century 21®.

Source: century21.com