Real estate has been rebounding for a number of years now, but workers’ income has not been growing nearly as fast. Between 2012 and 2015, house prices jumped up by nearly 24% while average income only rose up by 7%. As a result, home buyers are still wary about purchasing a home in today’s market.
A home is usually a lifetime or at least a long-term investment so you should refrain from ever rushing through the process. There is a little reason to purchase in an unpredictable market unless you meet all your demands at the right price. Demand is only going to rise in the next couple of years as millennials get ready to purchase a home and as a result, the number of single-family homes on the market will also rise. Patience may allow you to snag a hidden gem.
Buy lesser than what you can afford
Buying lesser than what you are capable of affording is a good strategy as long as you don’t cheap out and buy an inferior home in a bad neighborhood. Suppose you can afford a home for $500,000 with a loan, your salary, and savings, you may be better off purchasing a home for around $400,000. This will give you more leeway in the financing aspect and allow you to pay off the loan pretty quickly. This process should ideally reduce your financial burden and leave you with a good home simultaneously.
Be an attractive buyer
Ideally before you begin shopping for a home, you should preapproved for a mortgage loan. This will lead to sellers taking you more seriously especially a seller who is constantly receiving multiple offers. It will allow you to quickly plant your flag if you happen to discover an ideal home. Also, sellers are more likely to be looking to close a deal rather than wait for someone to pay an extra $10,000 on a $500,000 home. If a seller has 5 or 10 offers, the seller will be seriously considering the offer that has the highest certainty of closing.