4 Tips for Buying a Home in a Busy Market
When the housing market is hot, it might take you a little bit longer to find your future home, but it’s not impossible. Instead of rushing in on the first house you see or opting out altogether, here are four tips to help guide you home when the market is hot.
1) Don’t fall in love with every house you see
It’s easy to get excited when you’re looking at houses and envisioning your future. But try not to get too attached. Buying in a competitive market can take an emotional toll. Oftentimes, buyers will have to make multiple offers on different homes before their contract gets accepted. "I had one client who wrote 15 offers before they finally got one, and that's exhausting," said Glen Clemmons, broker and REALTOR® for Costello Real Estate and Investments. “[It’s an] emotional roller coaster of, are we going to get this one?" To better prepare yourself for the reality of a competitive market, try to ‘hope for the best but expect the worst.’ "What I would say is, check your heart when you walk through a house," Clemmons said. "[Going to a showing is] not a guarantee that you're going to get it. Put your best foot forward and be patient."
2) Know that you can always renovate or upgrade
Looking for the perfect home can feel like an endless search in a busy market. Everyone will likely be looking for the same move-in ready home. Not only does this make them harder to find, but it will also make them more expensive. To expand your home search, consider looking at homes that need a little fixing up. "You can fix ugly," said Mary Pope-Handy, a real estate agent with Northern California firm Sereno. "I would always go with the ugly house, with walls in the right places, in a good location, and then fix ugly over time." Cosmetic upgrades like painting and modernized features are typically not as expensive. Just make sure there are no large complications with the house like foundation problems, flooding, or other structural issues. Those tend to cost more. One option is purchasing a fixer-upper with a 203(k) Renovation Loan. With a Renovation Loan, you can combine the costs of a home purchase and home renovations into one loan. This is typically cheaper than buying a home and taking out a separate personal loan for renovations. Personal loans often come with higher interest rates which can cost you much more over time.
3) Explore your options in the condo market
Condos are often less popular than homes. In a condo, you live in a building with other people. Even though you have your own apartment-like space, you will share walls with people and probably won’t have your own yard. For many home buyers, these features make condos a less attractive choice. However, the competition to buy a condo is much smaller than the competition to buy a home, making condos a great gateway to homeownership. Plus, condos are typically in more densely populated areas than homes, making them ideal for younger buyers. Condo buildings will normally be in areas with shops, bars, restaurants, and even office buildings. “I think that there's going to be this increased demand in these dense downtown condo areas,” said Sean Waeiss, a broker and the owner of Wise Property Group in Austin.
4) Reassess your reasons for buying
There are many good reasons for buying a home. But if you’re buying just because you see other people buying or just because you want to own something, then you might want to step on the brakes. "Frantically trying to buy 'something' is a great way to make a bad purchase," said Scott Trench, the CEO of the real estate investing resource BiggerPockets. Before you make a big home purchase, talk through your reasoning to a friend or family member.
Buying a home is a big investment – you shouldn’t have to make any decisions alone. Consider talking to a financial advisor, real estate agent, or loan officer to help guide you through the process.
Source: Business Insider
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