Buying a Home in 2021 - It's a Seller's Market
April 23, 2021
All of this led to us being in a seller’s market in 2021. A seller’s market is when the supply for homes is low while demand is high. Prospective homebuyers will need to change their outlook and approach to homebuying if they want to successfully navigate this new market and purchase a home. If you are planning to buy a home this year, here are a few ways in which you can prepare.
Get Pre-Approved
No matter what kind of market you’re in, it is always best to get pre-approved before going to shop for houses. The last thing you want is to go look at homes, find the one you love, then have to wait on an approval and lose the dream home to another buyer.
This matters even more when you are in a seller’s market. A seller won’t want to wait on a prospective buyer to secure financing and miss out on an offer from someone who is ready to buy, ASAP! Getting pre-approved shows sellers that you are serious about purchasing a home, and helps avoid uncertainty in the process from the very beginning.
Have Your Finances in Order
It is imperative that you have set your budget beforehand, especially if you are buying a home with a co-borrower. Not only does this help avoid any arguments, but it also saves you time by narrowing down the houses you go look at.
Additionally, you should decide how much money you can afford to put down on a home, and organize the funds so that they are all in the same bank account, since your lender will need the account information when you move forward with the mortgage process. If you plan to borrow money for the down payment from relatives, it is important that you disclose this to your lender in case they have restrictions on gift funds.
Be Ready to Pull the Trigger
In 2021, houses are on the market for an average of just 28 days (compared to 44 days in 2019), so now isn’t the time for window shopping. Many people enjoy visiting open houses for homes that cost double their budget. This is fine if you are not actively looking to buy a home, but if you are serious about purchasing, you need to be decisive.
It is best to have a list of things that you absolutely need in your home before you start shopping, and if the house checks off all your boxes, you can feel confident about putting in an offer right away. You can also save yourself a trip by researching the house listings and pictures online before visiting.
Shop Below Your Budget
In a seller’s market, it is common to get into a bidding war. Because houses are in short supply, you may be up against more buyers who have also put in an offer on the home you love, which pushes up the price. If you really love the property, you may have to offer more than the asking price. Looking at homes that are slightly under your budget will give you the wiggle room to up your offer in these cases.
To make a bold statement to your seller, you can also write a letter with your offer explaining why you fell in love with the home. Having lived in it themselves, many sellers have emotional attachments to the house they’re selling. Knowing that you would appreciate it just as much goes a long way.
------------------------------
RELATED VIDEOS:
Annual Income Requirements for FHA Loans
Good Credit History Helps Get FHA Loans
Stay Informed About Your Mortgage Closing Costs
FHA Loan Articles
September 25, 2023Mortgage rates are hitting prospective homeowners hard this year and are approaching 8%, a rate that didn't seem very likely last winter. With so many people priced out of the market by the combination of high rates and a dwindling supply of homes.
September 19, 2023The FHA Handbook serves as a crucial resource for mortgage lenders, appraisers, underwriters, and other professionals involved in the origination and servicing of FHA-insured home loans. It outlines the policies and requirements for FHA-insured mortgages.
September 13, 2023FHA rehab loans are a specialized type of mortgage loan offered by the Federal Housing Administration that allows borrowers to finance both the purchase or refinance of a home and the cost of needed repairs.
September 8, 2023Borrowers considering an FHA loan should be familiar with some basic loan terminology. These loans are popular among first-time homebuyers and those with lower credit scores because they often offer more flexible eligibility requirements and lower down payment options.
September 2, 2023You may have heard the terms co-borrower and cosigner in connection with your FHA loan process, but aren't sure about the distinction. Both a co-borrower and a cosigner can help a primary borrower qualify for a mortgage, but they have different roles and responsibilities.
