Today's housing market has been a wild ride over the past two to three years with most markets experiencing major increases in prices due to very low inventories and outrageous demand. Until recently, the interest rates have hovered around 2-4% for the past decade it seems. That has all changed almost overnight (actually over the past 6 months), but it seems that have happened that quickly. We are still seeing low inventory, with some minor uptick, but demand hasn't really diminished either. There are certainly less buyers actively searching, and the ones that are, have had to completely change their expectation level on what they can afford. That being said, I don't expect a huge decrease in home prices in the Greenville market unless interest rates remain or go even higher. Many home sellers are not that excited about losing their low interest rate, so it will be mostly sellers that don't have a mortgage that might want to move...paying cash for the next house.
Interest rates have come back down from their highs, and we will certainly start seeing variable rates come back into popularity. These are adjustable-rate mortgages that can have 5, 7, and 10 years attached to them with lower rates before they start adjusting, giving you a fair amount of time to refinance into a fixed rate if and when the interest rates do come back down to lower levels.
STEPS INVOLVED IN PURCHASING A HOME
- Decide where it is you would like to live. Remember the three key aspects of value in real estate…location, location, location.
- Choose a competent professional REALTOR for guidance along the way.
- Choose a competent professional Mortgage Lending Consultant and get pre-approved for a mortgage.
- If you currently own a home, and you need to sell before you can purchase, that would be an important step to tackle prior to beginning your search. See “Choose a competent professional REALTOR for guidance” in step 2 above.
- Determine the price range with which you are comfortable. This should be established in conjunction with your lender. It is important to remember that a comfortable monthly house payment and one with which you are qualified can be completely different.
- Find that house!
- Make an offer based on a well informed market analysis of comparable homes that have sold.
- Unless you have enough available cash, you will need to provide proof of qualification with the offer in the form of a pre-approval letter from your lender as well as proof of funds for the down payment.
- Decide what concessions you want to include in your offer. Note that the cleaner the offer the better, especially if you are in a multiple offer situation where you are competing with other buyers.
- Negotiate the terms of the sale.
- Most offers will be contingent on finance, appraisal, and various inspections, but that won't necessarily be the case in a multiple offer situation. The more uncommon contingency might be the sale of a home that is not currently under contract as well.
- Prior to closing, you will need to obtain homeowner’s coverage from an insurance company of your choice.
- Choose a closing attorney to handle the settlement on the negotiated close date. Typically, you would want to take the advice of your Realtor for choosing someone that they are comfortable with.
- Satisfy the inspection and appraisal contingencies, if applicable.
- Listen to advice from your lender, especially the part about not making other expensive purchases that might affect your ability to close.
- Cruise to close! This step involves the final minor details such as setting up utilities to go into your name, scheduling the movers (please note that college buddies working for beer and pizza only apply to first time home buyers...:), getting the certified funds required for closing, and preparing for your first housewarming party! (Optional, but always fun)
Let’s delve a little deeper into a couple of these steps as it relates to today’s market. Finding possible homes of interest and making offers can sometimes be more difficult in a seller’s market. The inventory of new and existing homes is currently low, and many times homes can have multiple buyers making offers. This can lead to losing out on a house or two before you have success. It cannot be stressed enough to be prepared as a “ready buyer” prior to beginning your search. Talk with your lender and get pre-qualified. Do your best to save up so that you have the funds available for a down payment and/or closing costs. If you need to sell your current home in order to purchase, accomplish that part first. In today’s competitive market, most sellers are not going to consider the contingency of you having to sell your home first.
Some of the steps I listed above require the services of others such as inspections, closing attorneys, mortgage lenders, movers, contractors, and insurance agents. Knowing who to call that you can trust to give you the quality service can certainly ease some of the stress along the way. An experienced and competent agent can help by referring you to reliable professionals to contact in this regard.
Buying a home can be exciting and rewarding, but also a little frustrating. One can certainly increase the chances of ensuring a smooth and successful outcome by working with a licensed REALTOR to guide you in the process.
For more information, check out my Buyer's guide.
The National Association of REALTORS® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
Greater Greenville Association of REALTORS® represents over 3,700 members in all aspects of the real estate industry. Please visit the Greater Greenville Association of REALTORS® web site at www.ggar.com for real estate and consumer information.
“Every market is different, call a REALTOR® today.”