Every industry and way we live life shifted drastically in the wake of the COVID-19 pandemic, and it's probably not news to you that the housing market was amongst the industries that saw great demand that is now shifting quickly.
For those in the throes of house-hunting, the market fluctuation can feel daunting and overwhelming, but the good news is that the rise in cost of housing is trending up at a much slower pace than what we've seen recently, and we have some tips and insider info for potential homebuyers who are trying to find their dream home in an understandably shifting market.
We know how tempting it can be to dive in head first, commit to spending more than you should, or settle on what you really want and need just to secure a home. That's not our style, and we're here to help make your home-buying process as easy and painless as possible.
Here are a few tips to help homebuyers keep their cool in an uncertain market.
This might seem like common sense, but so many eager homebuyers jump into this market head first without a real picture of what their budget is and how much room they have, especially when considering homes in locations with HOA fees, taxes, and interest rates. Also, don't forget closing costs.
There's nothing worse than falling head over heels for a home that's out of your price range. Well, the only thing worse, actually, is losing out on a home you think is outside of your budget because you didn't get a comprehensive overview of your assets and what your money can really do.
We know how exciting it is to search for homes and flag your favorites. However, it's important to come in realistic, too, with a clear understanding of what you can afford as part of your monthly mortgage payment.
In addition, it's important to have a deep and accurate understanding of what you can spend on a down payment, what you want to spend, and how far you're willing and able to take your budget. Knowing this will help you set expectations and evaluate what's most important to you in a new home.
Your budget is dependent on several factors, such as the size of your loan or mortgage and how much you're able to put down for a down payment.
Banks usually prefer buyers to have a debt ratio less than 36 to ensure the ability to repay a loan. A home loan calculator can give a rough guide to monthly expenses.
Calculating your housing cost depends mainly on income and assets. If you put 80% down on a home, then your mortgage may be in excess of 10% of that. The price could be a bit more expensive, and it's important to keep in mind those easily missed expenses like HOA to determine the budget.
A loan estimate is a great place to start when calculating how much you can afford to spend. An experienced mortgage broker might be a good place to start your budget planning process.
We're going to be honest here. Not all homes are created and maintained equally, and we have seen homes with faces not even a mother could love. Many of these have outdated and rotted carpets, peeling paint, and some homes even have their own smell, and not an appealing one.
However, like the old adage goes: never judge a book by its cover. The fact that the property has a bad appearance does not necessarily mean the property lacks value. Ever hear the phrase "good bones" used to describe a structure? Just because the facade is lacking, doesn't mean the home is a total loss.
We often hear from first-time buyers who have big visions but need a more affordable budget. Let's be honest, a home purchase is a big expense, and sometimes getting a home in the most desired location means a bit of fixing up. An experienced real estate agent can help you find that diamond in the rough that will one day be your forever home.
At Cash DFW Group, we are well versed with "good bones" homes and have teams of tried and true contractors to turn those ugly facades into dream homes. We've seen and converted it all and are here to tell you that anything can be done. Keep an open mind in your housing search, especially in this hot market. You might uncover a diamond in the rough that's really your forever home.
Housing markets fluctuate regularly, especially in a post-COVID world where every market has seen rise and fall in short periods. Sometimes the housing market is more attractive than the buyer's desire. It produces buyers' markets. Properties will get snapped up quickly, but sometimes multiple offers are expected more frequently. Timing the market means preparing for the right buying time, and most homebuyers can't wait.
The purchase of a home is likely the biggest purchase of a buyer's lifetime, so we understand wanting to think through the decision to make a safe and sound financial decision.
We can understand how homebuyers may be a little confused with this market. We know many of you have been reading the news and hearing that this hot market means the asking price isn't the real price. We know there is a lot of anxiety and fear around buying a home right now due to the changes in the market.
This is why our advice is the same advice as it was before the market was hot - save money, pull your credit report, and know how much you can afford with this interest rate and potentially fluctuating interest rates.
There's no perfect way to buy in fluctuating markets, but there are smart ways, and making a purchase of a home based on your needs and budget is one of the smartest investments.
We know that emotions run high when making such a huge decision for your family and life - especially as a first-time buyer. We also know with this unpredictable market, houses can close quickly and tensions can rise.
It is important that your emotions remain calm so you can avoid costly issues like overpaying in the heat of the moment or missing a good deal that requires some more negotiation.
There is nothing more heartbreaking than finding your dream home only to realize it doesn't pass inspection or the seller is only accepting offers without an inspection.
It's important to remember that a home inspection is an important part of the home-buying process. It's meant to protect you from buying a home that isn't in the condition you thought it was.
We highly recommend that buyers consider putting a home inspection contingency agreement in place to protect you and to ensure you don't make a decision you later regret.
We just mentioned keeping your cool in a changing market, and we know that can be tough. Homebuyer burnout is real. We see it often. So many homebuyers take the fastest way to close, but it's not necessarily the smartest.
It can be tempting to skip the important steps to try to race to closing, but you shouldn't ever forego inspections or agree to spending beyond what you can pay just to put an end to a stressful experience or to beat a timeline. Allow yourself as much time as possible to shop smartly, and you'll be better positioned to make logical purchase decisions that will benefit you and your family for years to come.
The current market can be overwhelming, and the media likes to hype the extremes of the housing market. The reality is, and experts agree, that buying a home can be a wise investment in your future, and you should absolutely take the steps to do so if your budget and needs allow. Buying an affordable home is worthwhile, even for people who have a very tight financial plan, and there are options and housing for every tier of buyer.
Keep these tips in mind when navigating the current housing market, and reach out to your friends at Cash DFW Group to explore stress-free home-buying options without the headache. We're here to help, have the inventory, and know the contractors to make the most unlovable-looking home your forever home.
