How to Finally Buy A Home This Coming Year
The last two years have seen historic appreciation of home prices. Dwindling inventory combined with continued quantitative easing at the federal level have fueled an unprecedented fear of missing out (FOMO) mentality amongst homebuyers that have driven home prices to spectacular heights, while leaving many would-be homebuyers left on the sidelines. As 2021 dragged on, with prices showing no signs of slowing down, many buyers simply gave up on the idea, opting to wait out the market. 2022 is shaping up to be equally historic, but with interest rates poised to rise, time is of the essence. If you're serious about buying a home this year, here's what you need to do to make it happen.
Hire a rock-solid real estate agent as soon as possible
Your friend who got their license a few years ago and does two transactions a year for friends or family is not going to be your best bet here. In fact, short of hiring a truly bad or malicious experienced agent, this is the surest way to fail.
To compete in the current market, you need a Rock Star Buyer's Agent. But how do you find one? Look for an agent that is well-versed in your market, who has a successful track record of helping homebuyers achieve their home buying goals and who makes you feel comfortable. Interview at least three agents before selecting one.
Prequalify with a mortgage lender
Unless you have hundreds of thousands of dollars to put down on a home, you're going to need a home loan. And while it's possible to get pre-approved by your bank, the best way is through an independent mortgage lender who can access multiple home loan programs and offer you more flexibility when choosing which home loans are right for you.
Your agent can help you choose a lender. If you've hired the right agent, they will be able to give you first hand insights into how a lender operates, and whether they have a history of blowing up deals or moving mountains to get Buyers across the finish line. There are plenty of both types, and unless you're working with the right agent, you'll never know which type of lender you chose until it's too late.
See. Judge. Act.
A home is a huge investment, so it's important to take the time to find the right one. There's no getting around the fact that buying a home is an emotional process. And while it is impossible to remove all emotion from the process - nor should you feel like you must - it is imperative that emotions not be the primary driver in the process. Facts must drive the process. Otherwise, you'll quickly be swept into the fear of missing out (FOMO) mentality. Buyers remorse is a real phenomena, and of all the things in this world to regret buying, I can think of few things worse than it being your own home.
When working with buyers, my best advice for avoiding the FOMO mentality is to encourage my buyers to adopt the SJA mentality: See, Judge, Act. When a home is listed for sale, we schedule a showing so we can SEE it. I can't tell you how many times a buyer has called me in an absolute frenzy over a newly listed home. At that moment they would give body parts to be able to buy it. So, we schedule a showing and race to the property. I'm excited, their excited, we're all excited. Then we walk inside and within 30 seconds they say something like, "Wow, this doesn't look anything like the photos." Facts very quickly trump emotions when the smell of 8 cats smacks you in the face.
If my buyer wants to write an offer, we move to the next step: JUDGE. What are the home's strengths? What are its weaknesses? Is the home priced appropriately? Are there other offers? Would it be prudent to offer over list price? If so, by how much? Does it make sense to make any offer at all, or should we move on and start looking at something else?
Finally, once my buyer knows they want to buy this home, I encourage them in every way possible to ACT. And this is the crux of the process, because unless we act on facts, nothing else really matters. A good agent will be able to guide you through this process and pump the brakes if they sense that you are about to act based on emotion because they want to protect your best interests. A bad agent is going to push you to act no matter what because they're thinking about their paycheck.
If you're ready to buy a home this year, I'd be honored to be a part of your journey. Feel free to call, text or email me anytime.