Reprinted from RIS Media’s Housecall
By Hannah Whittenly
The housing market in some areas may make your home search more difficult. Be aware of what the market looks like before you decide to go house-hunting. Here are some other tips if you’re new to the housing market:
Be Prepared to Make an Offer
Get pre-approved for a loan before you start shopping for a home. This will let you know the types of homes you can realistically consider, as the last thing you want to do is find the perfect home and not be able to afford it. Having preapproval will also let you move faster when you do find the right home. In addition, the seller will be more willing to consider your offer if you already have financing secured. In a really hot market, the seller may have multiple offers on the table.
Look Into the Comps
Check out the comparable neighborhood sales or “comps” for the home you want to purchase, as this will tell you whether the price is at fair market value. You can adjust your offer accordingly with the value of the home. A drastically underpriced home may require extensive renovations, or there may be other problems you aren’t aware of yet. Comps are the baseline for how houses should be priced; an underpriced or overpriced home can be a red flag.
Have a Backup Plan
There may be instances in which you make an offer on the perfect home and your offer is rejected. If you can’t up your offer, it may be time to move on to another home. Keep an open mind when you’re shopping and look at more than one house before you make your decision. This may be more of a problem when it’s a seller’s market versus a buyer’s market. The time of year that you’re looking to purchase can also play a major factor when you’re in the market.
Consider Housing Alternatives
The traditional single-family home may not be the best solution for your first home, so it’s important to consider alternatives such as a condo, which will allow you to save money as you’re first starting out. A condo typically has a lower asking price, requiring a lower down payment. This can help you grow your equity and purchase a different home in the future. Another thing that you should consider is a home warranty, which can help cover any of the unexpected expenses associated with homeownership.
As a first-time buyer, you should also look into the various programs designed to assist those in your situation. In the end, consider all of your options when it comes to getting your foot in the door in the real estate market.