Buying a new house is like a challenging & complex sport. As a player, you need to get in shape & know the specific rules in order to navigate your way and win the game. Buying your new home this 2021 is a lot harder than you think. And the question is, are you ready to take on the challenge of buying a house this 2021?
Read more to learn what you need to know.
More Buyers than Homes
If you find a house in good condition and that is within your budget, chances are you are not the only one interested and making an offer. Even if it just hit the market.
As a buyer, you need to be flexible. You may have to make adjustments and sacrifices.
For example, it’s tough to win over a seller in a hot market if you make the purchase offer contingent on the sale of your current home. Understand the risk of any concession you make and don’t make an offer that is not within your budget. Talk to your real estate agent to look for other options in your local market and on how you can make a strong offer.
Increase in Home Prices
According to real estate experts, home prices are going to go up in 2021. But it won’t be as fast as they did last year. According to a forecast from Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association, there is a projected increase of 3.1% on the prices of existing homes in 2021, compared to last year’s 6.7% increase. The prices of homes vary by season. Homes are most expensive in the months of June & July. Cheapest in January & February. So when you decide to buy a home that can impact what you’ll pay. You’ll have more homes to choose from during the warm months, this is also the time where active home listings are highest. But demand is high then, that’s why homes sell more quickly.
Homes usually spent an average of 76 days on the market in the lowest-priced months, compared with 51 days in the most expensive months. In the lowest priced months, homes spent an average of 76 days on the market and only 51 days in the most expensive months.
The pandemic turned everything upside down, and buying a new home has become more challenging than it already was. Even though we are living in a pandemic, the real estate market found a way to work things out. Real estate agents, lenders, buyers, and sellers used technology to make it work by hosting virtual home tours, e-closing, smaller open houses, and organized zoom meetings to help keep the real estate business going.
For customers to feel confident and satisfied with the process, real estate professionals will continue to do whatever is possible. With a successful rollout of vaccines, the state, county, and the city will loosen their safety protocols & social-distancing regulations. But there is going to be a big reliance on online tools to help real estate continue in the meantime.
Buying a home virtually is not very different from buying a home in person. You will still be able to tours homes, sign a purchase agreement, and close on your new home. You’ll just have to do it digitally.
Things that didn’t change
One common mistake of a home buyer is looking for a home before looking for a lender. You need to get your finances in order first. Then you may look for homes.
Before you apply, check your credit reports and dispute any mistakes you see and find out your credit score. Before you apply, review your credit standing and you might even be surprised that your credit score isn’t what you thought it was.
Organize paperwork, prepare the required documents about your income, debt, employment, and financial accounts to get pre-approved. A mortgage pre-approval is an offer from a lender to loan you a certain amount on certain conditions. It’s not a guarantee for a final loan acceptance, but it will convince real estate brokers and sellers that you’re a serious buyer.
Mortgage rates expected to stay low
Economists expect mortgage rates to remain low in 2021 after falling to historic lows in 2020. The 30-year fixed-rate mortgage is projected to average 3% in 2021, down slightly from an average of 3.05% in 2020, according to an average of forecasts by Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association.
Even though rates are generally low, it’s still important to shop around for a mortgage. The rate you’re offered will depend on the lender and your financial circumstances. Contact multiple lenders to compare mortgage rates and fees, and choose the best deal you’re offered.