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If you’re on the hunt for your next home, you’ve likely hit a few obstacles. Maybe every home you like is already under contract. Or you keep running into bidding wars and losing.
Whatever your trouble, one thing’s for sure: The prices keep going up. According to the National Association of Realtors, the median price for existing homes is up nearly 5% year over year.
Yep. It’s a hard-knock life for home buyers these days.
So we thought we’d share a bit of encouragement—and advice—from folks who survived the home-buying frenzy and lived to tell it. Here are a few lessons Dave’s Facebook fans learned along the way.
Get a Financial Leg Up
In a seller’s market, cash is definitely king. Sarah M. just bought her first home with cash and admits it gave her an advantage over other buyers.
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Of course, an all-cash offer may not be an option for you. If that’s the case, then do the next best thing: “Get pre-approved with a lender that offers legitimate, credit-underwritten pre-approvals,” Steve B. suggests.
Mortgage pre-approval goes further than prequalification because you submit all the required paperwork up front. The bank then verifies the amount you can afford to pay for your next home. It takes the guesswork out of your home search and shows sellers you can back your offer up with real money.
Mortgage pre-approval takes the guesswork out of your home search and shows sellers you can back your offer up with real money.
Steve says that puts you in a much more competitive position as a buyer. “You can close faster, with less loan-oriented stress,” he adds.
Don’t Let Impatience Wreck Your Budget
If one pain point topped the list, it was this: “Finding exactly what we wanted in our price range,” Salina R. says.
Kathy S. wrestled with the temptation to bite off a bigger chunk of mortgage debt just to land a home. She bid on a home that was $10,000 over budget and lost to another buyer. “We know it wasn’t meant to be,” she says.
As fate would have it, they found—and successfully offered on—a home that was $10,000 under their budget! “We just made our first house payment, and knowing it isn't a stretch to our pocketbook is a great feeling,” Kathy says.
Patience can be hard to come by when you feel pressure to beat buyers to the punch. But try not to get so carried away you forget the financial goals you’re working toward. Remember, Dave recommends keeping your mortgage payment to no more than 25% of your monthly take-home pay on a 15-year fixed-rate mortgage.
Keep Your Options Open
Dave always says if you keep doing the same thing you’ll keep getting the same results. So why not shake things up a bit?
If existing homes aren’t working out for you, give new construction a try! That’s what Debby G. did. “We were able to get into new construction for much cheaper with a one-year warranty and no worries of major system failures,” she says.
Derek D. kept running into roadblocks, so he adjusted his expectations. “We ran into our right place by accident by broadening our search,” he says.
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Katie N. realized she would have to offer over asking price to get a home in her area. Sound familiar? Then limit your search to homes with a healthy margin between list price and your max budget. That way you can up the ante without breaking the bank. “We were blessed to get a good deal on a foreclosure,” Katie says.
Limit your search to homes with a healthy margin between list price and your max budget. That way you can up the ante without breaking the bank.
Selling a Home? Prepare a Backup Plan
In many markets today, buyers with a home to sell are running into an interesting problem. “We close on our sale Monday,” Shea S. says. “However, we do not have a place to call our own yet.”
That’s why it’s smart to research temporary living options before listing your home. That way, if your home goes quickly, you’re not stuck with no place to land.
Here are a few ideas to consider:
- Rent your home back from your buyers until you find a new place.
- Move into an apartment or other short-term rental.
- Crash with family (and save extra money in the process!).
Moving twice may be no fun. But it’s better than rushing into a home purchase you (and your budget) will regret down the road.
Keep Calm and Carry On
Buying a home is stressful in any market. But a seller’s market cranks up the pressure on all sides.
Barbara M. knows this anxiety all too well. She bought and sold a home this year and found contract negotiations especially trying on her nerves. “That was overcome by having a wonderful real estate agent,” she says. “You need someone who will be honest with you, is wise in the ways of negotiations, and can help you navigate the process.”
We couldn’t agree more! A good agent is more than a tour guide. They counsel you through every twist and turn of your home purchase, inspiring confidence along the way. Look for an agent who brings lots of expertise to the table. You can trust a seasoned expert to apply out-of-the-box techniques to help you find—and get a great deal on—the home that’s right for you.