10 Tips For Buying a Home In Today’s Market

Are you actively looking for a new home or considering starting to look, here are some tips to make you think.

The housing market has slowed down
The news is full of stories here and across the US about how the housing market is slowing down. There is no question, it is slowing. The following table shows number of homes sold in St Petersburg these last 3 months compared to the same period in 2017 and median prices of those homes sold.

Sales Volumes St Pete

The 30 year mortgage fixed rate is 4.79% compared with 3.95% at the start of the year. The difference in interest payments today on a $200,000 mortgage vs at the start of the year is around $140 per month.
Clearly rising interest rates and rising home prices are making homes less affordable and this is a major contributor to the slowing market.

Don’t try to time the market
Should you wait for the market to ease more in the hopes of picking up a bargain…and risk missing the home of your dreams? Or should you dive in now and possibly watch home prices ease further while interest rates climb? My recommendation is to listen to the often quoted saying that market peaks and troughs are only ever observed in the rear view mirror. In other words, no one can time the market. Instead, reaffirm the reasons you want to buy or sell – relocation, lease ending, expanding family, job change, right time for that dream vacation home – focus on your “why” to determine if now is the right time to buy or sell.

Have Your Financials in Order Before you look
There’s nothing worse than spending time finding that perfect home, only to be told by your loan officer that you don’t qualify for the amount you thought. Conversely, maybe you can afford more than you thought when you consider some of the low amount down loans available today. Remember Florida has down payment assistance programs for certain buyers, FHA requires 3.5% down, VA requires zero down and conventional loans typically require anything from 5-25% down. Have your pre-approval letter in hand before house hunting.

Right Priced Homes are Still Selling Quickly
Some homes are sitting on the market for weeks and months because sellers have priced homes above what buyers are willing to pay, or appraisers are valuing them at. Right priced homes are still selling quickly – work with a realtor to establish what the market value of a home is.

Work with the Right Buyer’s Realtor
Find a realtor who knows the housing market in your area. A realtor should have been in a lot of homes in the area and be able to help with pricing beyond the auto valuations of Zillow and Realtor.com. A realtor can set appointments for viewings so you can really see what you get for your money, they can help structure an offer for success, help negotiate price, contingencies, timing, personal property left in the home, they can bring a team of experts to help with the transaction or provide estimates for repairs, they can keep all parties in the transaction on track. Commission paid by the Seller is split between the Seller’s realtor and the Buyer’s realtor so there is no charge to you.

Don’t work directly with the Listing Agent
The Seller’s realtor is working for the Seller, not you. For example, there are alot of part time realtors who get business from family members and do very little else – despite their legal obligations it is very difficult to truly be unbiased. I’ve talked to some buyers who thought that working with the listing realtor will reduce the commission paid by the Seller and give more room to negotiate – this is not the case, the listing agent will pocket all the commission if they work with the Buyer and Seller. Work with an expert Buyer’s realtor.

Spend Your Time Looking at Several Homes
Every Buyer should have been inside at least 5 homes before deciding to buy. This just gives you a good idea of what you get for your money in that area – pay attention to the details, from the natural light to the flow of the home, to the quality and newness of finishes. By the time you have seen 5 you should have a good idea of what to expect in the neighborhood.

You can Modify Your home over time if you need
I always recommend looking at how you’ll use a home in the future – will you be working from home or expanding the family or changing use of space over time to accommodate the needs of older kids. As you look at the space, can you evolve it as the needs of your family evolve?

Everything is negotiable
Don’t be insulting with an offer to purchase, but do look beyond just the price – to make a strong offer and still get what you want, consider contract deadlines, contingencies, personal property, repairs, escrow.

Fundamentals of Preparedness Still Apply
No matter what the state of the market, or your motivation to buy, or the price point you are buying in, the fundamentals of preparing for a home purchase remain the same. Know the maximum amount you can borrow and have your lender’s preapproval, know your closing costs and the amount of money you have to bring to the closing table, know where any deposit is coming from – savings, family, friends, down payment assistance, retirement funds. Build a good estimate of the cost of ownership, not only mortgage, PMI and insurance costs but what about HOA fees, utility costs, maintenance and system replacements, upgrades you plan on doing. Go in with your eyes wide open!

Make sure that buying your next home is the exhilarating and positive experience it should be!

As ever if you are looking to buy or sell real estate in the St Petersburg, Seminole, Largo, Safety Harbor, Treasure Island or St Pete Beach areas then contact me for expert, professional help. 727.401.5997