If you've been paying even a little bit of attention lately, you probably know that the real estate market is a bit...crazy, right now.
Perhaps you know someone who sold their house in a weekend (or even in a day or an hour!); maybe you have a friend who has made offer after offer with no success.
It's the state of our market right now -- not just in metro Atlanta but in many markets all across the country: historically low housing inventory with extreme buyer demand mean that market conditions are less than ideal for homebuyers.
Does that mean you should wait to buy a home? Should you consider it "impossible" right now?
Not necessarily.
Last summer, when housing inventory conditions were similar (but nowhere near to what they are now), I wrote a post called, "Is Now a Good Time To Buy a House?" Much of what I wrote eight months ago still rings true: it may be the right time for you to buy right now if you
- plan to be in the home long-term (i.e., at least a few years)
- like the idea of cheap money, because along with historically-low housing inventory numbers we also have historically-low interest rates, which are contributing to high buyer demand
- work from home, especially now as we are still in pandemic-induced conditions and many people are working and homeschooling children from home
- would possibly consider being a landlord, if you had to move sooner than you anticipate but hadn't built up enough equity yet to do so (after all, refer to above: money is cheap).
But how do you buy a house in these extreme market conditions?
First and foremost, be ready to move quickly. Very quickly.
Decision-making surrounding a home purchase can be daunting, but gone are the days when a homebuyer could "sleep on it." Having a clear idea of what your homebuying wants and needs are, and having a prioritized list of what is important to you -- as well as a clear idea of your finances -- will make the process easier. We don't want our clients to settle for a home that isn't what they want, so our homebuyer questionnaire is a helpful tool to make your priority list in order for your home search. If you and your REALTOR® can assess each property, as it comes available, as to whether it fits your basic needs, you will be able to make a faster decision about whether or not it is the right property to make a move on.
Second, be proactive in your financing.
Ask your REALTOR® for a referral to their local, trusted mortgage lenders, and then ask those lenders if they can fully qualify you -- in other words, take your full loan application and put your file through underwriting before you find a home, so that you are a fully approved buyer, contingent only on identifying a house and on a satisfactory appraisal. This step can take the guesswork out of the process for sellers when they are comparing one buyer's offer to another -- the buyer who is fully approved takes away some of the uncertainty a seller might have about a buyer's ability to get to closing.
Third, come to terms with the cost of buying a home, and that it might be more expensive than you anticipated.
And in most cases, the market is more expensive than it was even 6 or 12 months ago, when you consider costs, dollar for dollar. But again, keep in mind that interest rates have literally never been as low as they are right now (I often think back to interest rates on home loans when my dad was a REALTOR® in the 1980s, when rates were as high as 18+%! That really puts our current sub-3% mortgage loan rates in perspective!)
So what do I mean that buying a home might be more expensive now?
Even six months ago, we may have been able to negotiate a contract in which the seller contributed to the buyer's closing costs. Heck, contract prices may even have been at or below the property's listing/asking price. Those days, at least for now, are behind us. Properties are not only selling above the asking price in almost all cases, but buyers should expect to pay their own closing costs. This may mean slightly lowering your price range, to make sure that you have enough money for, not only your downpayment but also your closing costs and up-front, out-of-pocket costs, such as home inspections and appraisal. Additionally, mentally preparing yourself to offer more than the asking price for a home on which you want to make an offer has become the name of the game, but discussions around price and terms are all a part of your larger home purchase strategy, and having the right REALTOR® can help you to determine what might work for you.
Finally, we are counseling our clients to be patient.
We have a number of strategies that we can use to help you put forward the most attractive offer possible to the seller -- this doesn't guarantee that your offer will be accepted, but it means we can discuss creative ways to make your offer stand out, to utilize all of the tools in our toolbox to help you put your best foot forward. We have a fantastic track record in helping our clients purchase a home, even in a difficult and competitive market like this one, but it may mean making several tries on several different properties before we experience success. However, patience and creativity go a long way, and with the right person negotiating on your behalf and the patience to stick to it (and know that buyers all over the country are in the same boat) mean that you will be moving into your home sweet home before you know it!
