IT’S THAT TIME AGAIN. THE SNOW HAS (ALMOST) MELTED AND THE SPRING HOMEBUYING FRENZY HAS BEGUN – AND ALTHOUGH IT MAY BE THE MOST POPULAR TIME TO BUY A HOME, IT IS DEFINITELY NOT THE EASIEST.
So far in 2018, we’ve already seen a trend of record low listings (the lowest in three years actually), and a steady rise in sales prices as the inventory tightens. This doesn’t mean you should shy away from your homeownership dreams, this just means you need to be as prepared as possible when navigating this unique housing market. That’s why we’ve compiled our four most important tips to give you a competitive edge when setting out on your spring home search.
1. Review Your Finances Early
It’s so tempting to set out on your quest and then decide if you can afford the ones you like. Repeat after me…Do. Not. Do. This. This usually results in buyer confusion and crushed dreams. The best thing you can do is sit down and take a good look at all your finances first. Decide how much you are willing to spend on a mortgage each month while factoring in miscellaneous outside expenses such as utilities, groceries, car payments etc. Also, if you know you are going to put less than 20% down, you will need to add some wiggle room for mortgage insurance. Once you decide what number you are comfortable with, use one of our mortgage calculators to figure out a sales price range you are comfortable with. This will give you a good starting point and a realistic view of what your options look like.
Another good thing to do before beginning the actual home buying process is to check your credit score. This will not only give you an idea of the programs you qualify for, but it gives you a chance to correct any inaccuracies you find. Correcting these errors could be the difference in qualifying for your loan when your credit is initially pulled by your mortgage lender. Worried about your credit? Southern Trust Mortgage has an in-house credit expert that is solely dedicated to helping our borrowers understand and rescore their credit (if necessary). Also, learn all about credit here.
2. Decide Specifically What You Want
When the right house comes along, you really need to be ready to jump and make an offer. This is not the time to be indecisive about the little things. Put together a list that details your “must haves” and “must not have” and stick to it. Such things may include the number of bedrooms or square footage you need, whether you want a pool, or how many miles you’re willing to commute to work. This will give you clarity from start to finish. Once you have a pretty good understanding of what you’re looking for, you won’t feel the need to compromise what you want or stretch yourself too thin looking at a million homes that “may work”.
For example, if you know for a fact that you need a one-story house, then put “must be one story” on your list and eliminate all two-story homes from your search altogether. Don’t look at two-story homes “just to see” and then concoct ways in your head to make it a one-story home. This will only distract your process. In the time it takes you to decide that you don’t want to spend the time or money converting this two-story home into a one-story, your dream one-story home could’ve come and gone. Now you’re back at the beginning still knowing you want a one-story home and wishing you hadn’t wasted any of that time.
Bottom line, figure out what matters to you and then only look at the homes that fit those needs.
3. Hire A Realtor.
So, you know your budget and have a pretty good idea of what you’re looking for. You’ve set your Zillow parameters so that when your perfect home hits the market you will get an email, text, carrier pigeon, etc. straight to your device. No listing can possibly get by you, right? WRONG. As nice as it is to have websites with current real estate listings at your fingertips, you still need a realtor. Generally, real estate agents get access to listings before they even hit the market. By the time you’ve copied and pasted the link to your newest find and sent it to family and friends for review, it’s likely someone else (that has hired an agent) has been shown, or even put an offer, on that house. It is simply the competitive climate we are in nowadays.
Getting access to listings as early as possible isn’t the only benefit of hiring a real estate agent. Agents also have an extensive knowledge and access to information about the neighborhoods and homes you’re looking at. They can also offer the best guidance in negotiating an offer or contract. They will present all of your options but can educate you on the best way to be as competitive as possible within your limits. This is especially necessary when you are going up against multiple other offers on a specific property.
4. Get Approved Early
Get in touch with a mortgage professional as early as possible to get pre-approved. Having a pre-approval letter already in hand when looking at homes ensures that you are able to make an offer quickly and seamlessly when you are ready to. This means you won’t have to wait 24-48 hours after deciding to make an offer to obtain the letter verifying you are approved for that amount. Instead, you can make an offer immediately. To get an even bigger edge on the competition, have a pre-approval from a local lender. Seller’s often given preference to buyers with offers from local lenders as opposed to an online letter from an out-of-area company.
To take it even a step further, Southern Trust offers the Priority Approval initiative. This is a full credit approval guaranteed in just 24-hours! How is this different from a traditional pre-approval? A full credit approval gives buyers the confidence to shop within their approved loan amount with an approval that has already been underwritten. A traditional pre-approval is just based on the information provided on your loan application. It is ultimately contingent on having your file underwritten. A credit approval through Southern Trust’s Priority Approval eliminates any doubt a seller may have that the loan will close smoothly or on time, and therefore, gives your offer a great competitive advantage over others.
The Spring Homebuying craze can be intimidating for even the savviest buyers, so we hope these simple suggestions will help clarify what you need to do to stand out from others who are eyeing the same homes you are. If you should have any questions along the way or would like to simply begin the mortgage process, we have seasoned loan professionals in several locations ready and excited to assist you. Reach out to one of them today to learn more!