The process of shopping for a home can be overwhelming, especially for first-time buyers. Inventories of homes for sale are still very thin in most markets and have yet to return to pre-housing bust levels. Particularly hard to come by are so-called “starter homes” because they are being scooped up by investors in addition to traditional buyers.
If you’re searching for a home in a tough housing market, don’t give up. Here are some tips that can help you find your dream home.
1. Draw up a budget. Buying a home is an expensive endeavor, so it’s important to be prepared. Finding your dream home, then discovering you haven’t got the cash to pull off the purchase, can be disastrous. Before you look at even one listing, draw up a budget that accounts for all costs, including:
- down payment
- closing costs
- property insurance
2. Be ready to buy. Once you find a home, you must be ready to show the seller that you’re serious. One good way to do this is to get pre-approved for a mortgage. Today, many homes are being purchased by investors who are buying with cash, and you may be competing against one. Sellers won’t want to take a chance on you if there is a chance that your financing will fall through, so get a pre-approval letter from your lender to include with your offer.
3. Stay on top of new listings. Some real estate websites and brokerages post “coming soon” listings for properties that are not yet officially on the market. Spend time every day searching for these listings, as well as for new listings that fit your criteria.
4. Don’t be too picky on repairs. Your inspection will bring to light a number of issues that will need to be addressed, either before or after you close. Go through the list carefully and decide which repairs you can do yourself for little or no cost and which repairs the owner will either need to fix or compensate you for in the final settlement. By paring down the list to repairs that are significant and costly, you’ll improve your odds that repairs won’t become a deal breaker.
5. Don’t make an emotional decision. Don’t allow yourself to fall in love with a house until you have thoroughly checked it out and you know that you can afford it. Emotional buying decisions are bad decisions much of the time. Revisit your budget and get approved by your lender before you let down your guard.
Steve Cook is executive vice president of Reecon Advisors and covers government and industry news for the Reecon Advisory Report. He is a member of the National Press Club, the Public Relations Society of America, and the National Association of Real Estate Editors, where he served as second vice president. Twice he has been named one of the 100 most influential people in real estate. In addition to serving as managing editor of the Report, Cook provides public relations consulting services to real estate companies, financial services companies, and trade associations, including some of the leading companies in online residential real estate.