How to buy a starter home in today’s market
Buying a home is an arduous process. Trying to buy a starter home in a hot real estate market only adds fuel to the fire. Hot markets, such as the ones we’re seeing in California, especially in Orange and Los Angeles counties, are bad for buyers in search of a budget-friendly starter home.
However, that is exactly the real estate market we are seeing for 2017.
A National Association of Realtors (NAR) survey found that the number of households that feel the economy is improving surged to 72 percent for the first three months of 2017. “Forty-seven percent believe that strongly, up from 45% in Q4 2016 and 44% one year ago in Q1 2016,” NAR said.
When the economy improves, competition spikes. And when competition spikes, home prices soar. This can be bad news for first-time homebuyers. But there is still hope.
Here are five expert tips for budget homebuyers hoping to snag a starter home:
- Find a good real estate agent: We know this isn’t the most helpful advice, but statistics show that buyers who work with a real estate agents save money on real estate transactions. Since the seller pays the commissions for both the seller’s agent and the buyer’s agent, there’s typically no cost for buyers to use a buyer’s agent. Also, a real estate agent who specializes in the area in which you hope to buy will be able to guide you toward the right property.
- Get pre-approved by a mortgage lender: This is kind of a no-brainer, but important nonetheless. A pre-approval gives buyers a stronger case when bidding on a home against other buyers. Sellers want to know that the offer they choose will actually go through and a pre-approval from a lender will help provide peace of mind.
- Prepare to compromise: Real estate transactions require compromise on both sides of the aisle. Even more seasoned buyers and sellers know that without compromise, most deals fall apart. Whether you’re bargaining on price or seller credits or improvements, compromise is part of the negotiations.
- Be patient: Buying your first home is a big step. Even if you think you’ve found the perfect home for you and your family, real estate transactions don’t always work out, especially in hot markets. Being patient throughout the process and preparing for the ups and downs will help you survive.
- Be personable: Sellers can have an emotional attachment to the home they are selling. More often than not, they want to know that the buyer will love the home as they did. Include a letter and even a family photo in the offer. Appeal to the seller’s emotional side by ensuring them you will love the home and have plans to raise your family there – just as they did.
For more information on how to buy a starter home in today’s market or to get pre-approved for a home loan, contact one of our licensed loan officers today.