5 Tips For Buying Your First Home In a Competitive Market
2020 has been an extremely competitive year in real estate, especially for first-time homebuyers. With the lowest rates we've seen in years, many people are jumping on the opportunity to purchase their first house. If you're considering joining the competition, here's a few things you can do to improve your chances of finding the perfect first home.
1. Pay Down Debt
If you're hoping to buy a home within the next year or two, you should start setting yourself up for success now. When deciding how much a lender can approve you for, they will consider your credit score as well as your debt to income ratio. Free up as much of your monthly income as you can. Start by paying off credit cards or refinancing your car loan for a smaller monthly payment.
2. Start Saving for a Down Payment
It's possible to buy a home without a downpayment, but it can definitely be more challenging. Having a down payment will increase your buying power in a competitive market. The required down payment can range from 3% to 20%, depending on what type of mortgage you go with. If you're unsure how much you need to save or what type of mortgage would be best for you, you can reach out to a lender for input.
3. Get Pre-Approved
Once your debt and credit are in a good place, you should reach out to a lender. Having a pre-approval letter will strengthen your offers. Getting pre-approved will help you understand what you can afford and is critical in a competitive market. When submitting an offer, you're likely competing with multiple strong offers and if you're not pre-approved you may not be considered at all.
4. Be Patient and Willing to Negotiate
The first house you fall in love with may not work out. You should be prepared to submit multiple offers and understand that if you truly want a home, you might have to fight for it. We firmly believe that the best thing will always work out in the end, but sometimes it takes longer or looks different than you expect.
5. Find an Agent Who Will Have Your Back
Buying your first home is a big decision and in a competitive market, houses sell fast. You may even find yourself in the midst of a bidding war. You're going to want someone on your side. A good agent will prioritize you, and send you listings as soon as they show up. They will negotiate on your behalf and protect you, legally and financially, during the entire purchasing process. Don't be afraid to get picky when you're deciding who to hire. You want to work with someone who understands your needs and will work nonstop until they're met.
Client Success Stories: First Time Home Buyers Tomas and Vivika
Tomas and Vivika approached us with the desire to buy their first home in the summer of 2020. The Cache Valley market was very competitive, especially for first-time homebuyers. It was a long road of ups and downs, but they were patient and never gave up.
After 4 months of looking and several offers, they finally moved into their first home a few weeks ago. Congrats on the purchase of your first home Tomas and Vivika! It wasn't easy but we knew we'd find it for you and we're so glad that it all worked out perfectly in the end.
"We worked with Carol and Ron for 4 months and they were amazing! They were very dedicated, they worked around the clock sending us different properties and even showing houses after hours and on Sundays. They were easy to work with and always listened to what we wanted. They found us our first home and we couldn't be happier. We would definitely recommend them for all of your realty needs. Thank you, Carol and Ron."
-Tomas & Vivika
We'd love to help you buy your first home! Schedule a free consultation with us to see if we're a good fit.