Bidding wars seem to have become the norm rather than the exception. House hunters are now positioned to buy as the housing market settles down, but are they too exhausted to even try?
The housing market was crazy for months and months, leading to burnout among many homebuyers who found it hard to compete against cash offers and being priced out of the market. Here are five tips for homebuyers struggling to stay the course.
A Stabilizing Housing Market
Rising rates and slightly damping demand are making homebuyers hopeful that the seller’s market may cool enough to open up some inventory. In some areas new builds are alleviating the inventory problem. Rising mortgage rates may also help, as historically higher interest rates help depress the market a little.
While the market may be stabilizing, it’s nowhere near fully stable yet. In many areas, housing supply is still measured in mere weeks, rather than multiple months. Certain cities are still seeing offers come in in excess of $50,000 over asking price, cash offers are king, and houses in highly desirable seattle neighborhoods may sell before they even hit the market.
However, if you’re looking for a home in a more affordable suburb, hope exists to get an offer accepted on a very nice home at a decent price. Even if you’re feeling exhausted, don’t give up yet! With mortgage interest rates climbing, buying now could save you tens of thousands of dollars in interest compared to buying near the end of the year.
5 Tips for Seattle Homebuyers Who Are Still Searching
If you’ve been looking for a home over the past year, you’re probably exhausted. That’s OK. It’s been a rough 24 months for everyone, and trying to house hunt in the middle of a pandemic wore many people out. Here are five things you can do to rest and refresh yourself before restarting your search for a home.
1. Take a Step Back and Breathe
Now is a good time to shake it all out and go back to basics.
Why do you want to buy a home? Is it “time” in your overall life plan, or are you simply seeking to invest in real estate while prices are still climbing and you can realize your investment?
Maybe you’re getting married, or having a baby, and want more space. Perhaps you even just want a yard so you can get a dog.
Your job might be a factor. You could need to move to a new city as part of a relocation package, or you might even be starting a new remote job and can live anywhere you want instead of being restricted by a commute.
What are your long term goals? Are you looking for a starter home, or a forever home? What you seek may be different if you plan to turn around and sell the house in the next five years, as opposed to making a long-term investment in a family home to pass down to your children.
Ask yourself if a single unit or multi-unit property makes more sense. A single family home is the most common choice, but you could hack your house payment if you consider a duplex, triplex, or fourplex.
2. Review Your Must-Haves in a Home
A lot of homebuyers have a laundry list of must-haves on their “dream home” checklist, and this can cramp your options. If you have simply set too many deal breakers on your list of must-haves in a home, in a tight seller’s market you may have to compromise.
Consider buying a fixer upper with a reno loan. This can let you take a slightly imperfect house, and reimagine it to cleave more closely to your deepest desires. Maybe it’s creating your dream kitchen, or perhaps it’s a luxury master suite with an ensuite bathroom.
Take another look at your list and mark down what could be compromised on or possibly engineered into a rebuild on a fixer upper home. You might be surprised how many more houses you get to look at when you opt for something that isn’t getting rave reviews at open houses.
3. Revisit Your Budget
With home prices a lot higher than a year ago, the down payment and closing costs can be a lot more than planned. Perhaps think about lowering your budget for a home so you don’t feel the financial pinch.
If you have a certain amount set aside for a down payment, think about what your home loan could look like if you put 10% down instead of 20%. Sure, you’ll have to pay private mortgage insurance premiums until you reach 20% equity, but it might be worth it if it puts you in the running for some of the higher priced homes.
Alternatively, consider a smaller home. It could be cheaper to buy a two-bedroom and get a We-Work space in town than to hold out for a three bedroom so you have a home office, especially in a market where homes with more square footage are going fast.
You can use the money you’ll save by going smaller to cover the expense of off-site office space, and you’ll be able to achieve better work/life balance when your worksite isn’t at your house.
4. Bolster Your Credit
If you haven’t been spending the last year working on your credit, start now. Check your credit score to see where you are at. Get copies of your credit report from all three major credit bureaus, look for inaccuracies, and pay off debt where you can.
Your DTI ratio is one of the most important factors with home prices this high. By reducing your debt burden, and refraining from making any large purchases or applying for any new lines of credit, you can make your credit report look better.
5. Partner With the Right Lender
Consider becoming a Diamond Homebuyer to gain a competitive edge and compete with all of those cash offers out there. Sammamish Mortgage offers this free supplementary program to mortgage applicants.
The program provides help getting your offer accepted by creating an appraisal gap strategy, underwriting the loan up front, and communicating with the seller to confirm your worth as a buyer and provide a short time-to-close.
Why Choose Sammamish Mortgage?
At Sammamish Mortgage, we can help you get fully preapproved for a mortgage and assist you in overcoming other common home buying hurdles, even in a seller’s market.
Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get preapproved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.
Contact a loan officer if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.