By Brooke Gifford
Community Bank Mortgage Loan Consultant, NMLS ID #1159638
Buy or wait? It’s a question many homebuyers are asking themselves this time of year. Spring is in the air, and the surging residential real estate market of the past two years has led to record-high home prices and record-low inventory.
According to data from realtor.com, the inventory of homes for sale dropped 53 percent between April 2020 and April 2021. And 2022 is looking to be another whirlwind year for buyers — especially first-timers. Buyer interest continues to outpace the number of homeowners willing to sell, making this year’s real estate game a perfect seller’s market, an ongoing trend we’ve seen for months.
But like clockwork, spring historically tends to be the most competitive time to buy a home. It may be the warmer weather, and the end of the school year looming that urges buyers and sellers to jump into the market.
The burning question: How do you navigate the spring housing market?
First, understand your finances. You need to have a clear picture of your financial situation to help you determine a realistic down payment and how much you can qualify for.
The usual tips apply more than ever, like getting prequalified for your mortgage. Especially in today’s hot market, every second counts. Take the steps to get prequalified so you’re getting an estimate of what you might be able to borrow based on important information you provide about your finances, as well as a credit check. During the prequalification process, your lender can help you learn about and understand different mortgage options to fit your needs. Many realtors and real estate agents will encourage you to get pre-qualified before they show you a property. Getting prequalified is a smart step to take and it shows sellers that you’re a serious homebuyer and ready to take the next steps to secure a mortgage.
Act quickly, but patience is key. Because of limited inventory, houses are selling before you even have time to view them online. You’re in the same boat with hundreds of thousands of buyers. So while it’s important to be ready to see a listing and put in a quick offer at a moment’s notice, be prepared, review your contract with your attorney for contingencies, and be ready to go. Homebuying in a hot market is a marathon, not a sprint.
People do crazy things to buy the home of their dreams in a hot market. Like purchasing a house sight unseen to make a quick decision. But don’t cut corners. It’s one of the biggest purchases and investments you’ll make. Don’t waive the home inspection contingency just to strengthen your offer. While a competitive market often requires quick thinking and a potentially higher purchase price to walk away a homeowner, it doesn’t mean you should have to give up insights into the home you’re purchasing.