Tune in here for some important tips about buying a home in 2021.
You may have noticed recently that inventory in our market is low and that homes are selling very quickly. This has created a level of demand that we’ve never before seen. When a house hits the market, it’s not uncommon to see the seller quickly presented with 10 to 20 offers. Homebuyers in the market are learning that they have to be very aggressive to successfully purchase a home. I don’t just mean going above list price or shortening the closing time frame; buyers are more willing to do things they normally wouldn’t to beat the competition.
For example, some buyers are putting down 20% and waiving the appraisal period. Some are doing home inspections but will only walk away from the deal if something truly big comes up on the report. They’re also declining to ask the sellers for any repairs. Others are releasing their earnest money to sellers after the contingency time frame.
Those are all very aggressive terms that we don’t normally see in a competitive offer, and they’re becoming more and more common in this market. The buyers who aren’t comfortable with writing them into their offers aren’t getting accepted. Naturally, that leaves buyers frustrated.
Buyers are more willing to do things they normally wouldn’t to beat the competition.
If you are truly earnest about buying a house right now, you need to have a clear understanding of what’s happening in the market. As it is, you may have to write offers on multiple homes before you get one accepted. In some cases, we find that some buyers simply don’t have a strong enough financial position to participate in this market. For example, there’s virtually no inventory in the price point under $300,000, and that’s where the market is strongest. Buyers are all competing voraciously to get homes in that range, so if a buyer comes in with a low down payment (or none at all), they’ll find it very difficult to compete.
The Howell Group is taking the time to have thorough consultations with our buyers to help them understand the market and how they can position themselves strongly when writing an offer. We may simply advise them that right now isn’t a good time for them to buy at all. For some, it may be best to sit back and simply watch where the market is going and jump in when they’re ready.
When it comes to pricing, some buyers who have been shopping for quite some time have noticed that prices have risen significantly since they began their home searches. The reason for that is, once again, supply and demand, along with low interest rates. Rates are so low right now that buying power is through the roof. That is a primary reason I encourage people to buy a home right now. If you bought a home now, you could lock in our historically low mortgage rates.
Ultimately, if you’re thinking about buying this year, we encourage you to reach out to us, as this isn’t something you’ll want to do on your own. You’ll need a strong, assertive agent to walk you through the process. It’s not enough to want to casually shop for homes; this is not the market for that kind of activity.
Don’t hesitate to contact us with any questions you have. Let’s talk through all your options and get you set up for success. Also, let us know if you want an updated value of your home; we’re seeing home equity increase every day in the current market. We would be glad to help you.
