We’re just going to come right out and say it – 2021’s housing market is uber competitive and it’s going to be hard to find a house. Markets around the country are experiencing an inventory shortage and for the first-time homebuyer, it’s going to be a challenge. But don’t let that freak you out!
We have some great tips for first time buyers that’ll give you an edge over other buyers so you’ll have the best chances of finding the home of your dreams.
1. Get pre-approved for a mortgage
A pre-approval letter from your lender is a great way to give you the upper hand in comparison to other first-timers because it eliminates the nail-biting anxiety that comes while you wait for the approval. A pre-approval will also give you and your agent a hard line regarding your budget, which helps you look at houses you actually can afford. There’s nothing worse than falling in love with a house you think you can afford but you’re actually approved for much less.
2. Hire a top-rated real estate agent
A common mistake first-timers make is hiring the first real estate agent they find online. You do not want to do this! Take your time and read reviews from previous clients. Don’t be afraid to interview (yes, interview!) real estate agents either on the phone or in person. They are helping you make a huge decision and you definitely want to make sure they understand their market and how to negotiate on your behalf.
3. Decide what you will and will not compromise on
One of the things about house hunting online is that we’ll find houses with the features that we love and we want to add them to our own wants list. However when you look at properties in your desired area, you realize finding a house with all of those features may be outside of your budget. You need to be able to look at your wants list and be willing to whittle it down to must-haves. If you’re unwilling to compromise, the top agent insights indicate smaller cities in the south are growing in popularity partially because a buyer’s budget is likely to go a lot further than if they were to stay in a big city.
4. Be realistic about how far your money will go
Unfortunately, unless you have cold hard cash to make up the difference, you need to stick to your budget (aka the amount of money your lender approved you for). It’s difficult to reconcile the fact that you may not be able to get a house with a spa bathroom, a finished basement, and top of the line appliances on a meager budget. You need to manage your expectations and have a realistic idea of how much house you can afford. Fortunately a top-rated real estate agent will be able to help you stay within budget.
5. Submit your best offer first
Typically buyers will submit offers that allow for future negotiations, but in a hot seller’s market, you need to come in with your best offer right out of the gate. Real estate agents are seeing an increasing number of bidding wars happening because there aren’t enough houses on the market to meet demand. By submitting your best offer first, be it offering at or above asking, waiving inspections (we don’t recommend this), or being flexible with the closing date, it could be the most appealing to the seller and they may even accept it.
As a first-time homebuyer during a hot seller’s market may not be the ideal time to dive in, but sometimes it’s unavoidable. With the help of these tips and the advice from a good real estate agent, your experience shouldn’t be as stressful!