Buying a Home? Here’s How to Navigate the Current Market
Yes, it’s still a seller’s market. With interest rates creeping up, home prices are beginning to come down, but inventory is still low, and it can be a discouraging time for home buyers. In today’s market, you’ll pay a little more whether you buy or rent, and buying is always the better choice if you’re able, because it’s an investment that you can sell when you’re ready to move again. Housing prices may be on the high end now, but the truth is, there really is no such thing as a bad time to buy a house, especially when you need one.
What You Need to Do to Buy a House
No matter which kind of market you are buying in, there are still steps you need to take before you are ready to enter the real estate market. You need to get your finances in order, determine what you have to have in a house, find a real estate agent you trust, and begin the process of house hunting. Once you find a home, you’ll make an offer, and go through the escrow and closing process. The basics of the process are the same no matter what kind of market is out there.
Get Your Finances in Order
The first thing you need to do is to be financially ready to buy. This can be harder when you are paying more in rent, but it is possible. Look carefully at your monthly budget, your savings, and start calculating what you will be able to pay each month. The best time to buy a home is when:
- You have low debt (or ideally, no debt).
- You have a good nest egg for a down payment and closing costs, with some left over for potential home repairs.
- You can handle moving expenses.
- You have a monthly budget that can handle a mortgage payment.
A good rule of thumb is to keep your mortgage payment to approximately 25% of your take home income. This includes the mortgage (principal and interest), property taxes, home insurance, and any PMI (private mortgage insurance) you’ll need to take on. Once you know how much you can afford each month, you can use a calculator to determine the price you can pay for a new home. After that, you can start contacting mortgage lenders to get preapproved for a loan. Pre Approval is crucial in today’s housing market, as it shows sellers you can afford to buy their house and they won’t have to worry if you can get financing or not.
Find a Real Estate Agent You Trust
While there is a lot you can research on your own, you need the help of an expert when you are buying a house in today’s market. Your agent can tip you off to a great house before it hits the market, and help you negotiate the offer process so you don’t pay more than necessary. Using a real estate agent is free for the buyer, so using one should be a no brainer. When you choose an agent, make sure you find one who is great at communicating, is focused on you as a client, and has experience with buyers in your position. A good agent is invaluable to homebuyers navigating a seller’s market. If you’re looking for a great house, contact Amberwood Real Estate today!
Start the House Hunting Process
First, in a seller’s market, it is easy to fall in love with a dream home that is out of your range, so make sure you find an agent who understands your budget. Make a list of your “must haves” and “nice to haves” and focus on homes with those features. Look past the surface level easy fixes and focus on location and layout. A good neighborhood is essential for long term success.
This can be the most intimidating part of what you need to do to buy a house, and this is where your agent is invaluable. Your agent will work with you to submit a strong offer, and help you through the negotiation process, especially if the seller received multiple offers. Keep a cool head, put your best foot forward, and don’t get sucked into paying more than you can afford.
Finding an excellent agent is the key to the whole process. With a good real estate agent, you can navigate even the most frustrating market. If you’re looking for a local real estate agent who can help you navigate the current housing market, contact Amberwood Real Estate today!