Housing prices have made it difficult for many young people to achieve homeownership. Fluctuations in the housing market can add to those difficulties because, as things heat up, finding a home you can afford becomes more challenging than ever. The following five tips can help you find your dream home when shopping in a seller’s market.
1. Stick to Your Budget
This is the cardinal rule in home shopping. Even if most of the houses you like are out of your price range, taking on a larger payment than you can comfortably afford will only lead to problems. For example, you may need to give up things you care about to make monthly mortgage payments, which can lead to resentment. It can also cause you to go into other forms of debt trying to maintain a lifestyle that is no longer within reach.
Your rent payment is often a good starting point for gauging a comfortable monthly mortgage amount if you are currently renting. Keep in mind that changing interest rates affect payments, as do the structure and term of your mortgage.
2. Be Willing To Overlook Minor Issues
Some homeowners take excellent care of their homes, making both large and small repairs as they are needed. Others only address things when absolutely necessary. As a result, you will see houses in a range of conditions. If someone has taken good care of a house but let minor repairs fall by the wayside or failed to make cosmetic upgrades, you have an excellent opportunity to get an affordable home that you can make your own.
Being willing to overlook minor issues in a home can help you find one that is structurally sound and affordable. Sure, it might need cosmetic renovations or a few upgrades, but if the foundation, framing, and major systems are sound, you can work on other things after you move in. To be sure, always having an inspection performed is a good idea. Someone who has undergone home inspection training will be able to spot the issues that should raise a red flag during the purchase process.
3. Expand Your Neighborhood Search
Some home buyers start their search with a specific neighborhood in mind. If that is the case, you may find yourself priced out in a hot market. However, expanding your neighborhood boundaries can provide price relief in some areas. Plus, you might find a new location you love but wouldn’t have considered otherwise.
Before expanding your home search, do some research on the new neighborhood. Check features like transportation options, ease of commute, school systems, and access to medical facilities to ensure it meets your needs.
4. Work With a Buyers’ Agent
There are several ways to approach home buying. For example, some shoppers choose to do most of the work themselves. This may seem like the best approach, but it can leave you out of the loop on new listings. In a hot market, that makes it very hard to view houses before an offer is presented. The easiest way around the problem is to work directly with a buyer’s agent.
Your agent will identify houses coming onto the market and schedule showings immediately, giving you the best chance to find one in your price range. He will also handle all required paperwork with your interests in mind, which is a big plus.
5. Shop Around for the Right Lender
You want to work with a knowledgeable lender to find the best mortgage program for your situation. No matter what that is, there is a program that fits your needs and budget. The trick is to find the right lender to build a mortgage package you are comfortable with. Once you do, get a preapproval to help make your offer more attractive to sellers.
It is possible to buy a house in a hot real estate market. Be sure to start with a firm budget limit, work with knowledgeable lenders and agents, and always order a home inspection to avoid major trouble down the road.