There’s no doubt we’re in a seller’s housing market. With inventory at record lows, demand surging and prices on the rise, buying — even just finding — a home in today’s market is quite the challenge.
Of course, nothing’s impossible. If buying a home is on your radar for 2021, there are still ways to do it. You’ll just need a little forethought and some good old creativity, and the American Dream could very well be within reach.
Are you hoping to buy a home in 2021’s hot housing market? These five tips can help you see success.
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1. Qualify for the lowest mortgage rate you can
Home prices have been on a tear in recent months, and according to Realtor.com, they’ll rise another 5.7% just this year. Fortunately, record-low mortgage rates can help offset those rising prices — that is, if you can snag them.
To make sure you’re getting the best rate possible, take time to boost your credit score first. Pay down debts, settle any overdue accounts and alert credit bureaus of any errors on your credit report. Saving up a larger-sized down payment can also help your case.
2. Get pre-approved before beginning your home search
A mortgage pre-approval is non-negotiable in this environment. Not only can it give you a good price range to work with, but it can also make sellers more likely to choose your offer.
When faced with multiple bids, pre-approved ones are typically stand-outs, indicating a buyer is prepared, ready to buy and a safe bet to follow through with the deal.
3. Work with an experienced agent
Having a great real estate agent can give you the upper hand in a seller’s market. For one, they can speed up the search for you. They can alert you ASAP when a suitable property hits the market, they can schedule day-of tours (or even tour homes for you) and they might even know of up-and-coming listings that aren’t quite public yet.
Thanks to their experience and expert negotiation skills, agents can also help you submit a more competitive offer when you do find that dream house.
4. Consider buying when it’s not a seller’s housing market
Most experts predict things will get easier toward the end of the year — particularly when vaccines are more widely spread. This will likely spur more on-the-fence sellers to list their homes, boosting inventory and tamping down price growth.
Here’s how Dannielle Hale, chief economist for Realtor.com, put it in her recent 2021 forecast: “The housing market in 2021 will be much more hospitable for buyers as an increased number of existing sellers and ramp-up in new construction restore some bargaining power for buyers, especially in the second half of the year.”
The long and short of it? If you can wait a few months to buy that home, you probably should.
5. Pull out all the stops to impress sellers
Submitting a great offer is more than just a numbers game. If you really want to stand out, include an offer letter, and make a personal appeal to the sellers (you can even include a photo). Waiving a contingency or two can also help, as can a larger earnest money deposit or being flexible with your closing date.
The bottom line
It might be a seller’s market, but finding an affordable home is still possible. If you take time to prep your credit and finances, get pre-approved for your mortgage and enlist a great agent, achieving the American Dream may be easier than it seems.