First-time home buyers are both excited and nervous! There’s so much to learn, steps to take, research to do and then the big decision! It starts with the preparation and budgeting. Figuring out how to make the transition, when, where and what price point should be looked at. It can be overwhelming.
The first step needs to be getting pre- approved and we’ll talk more about that, but let’s just jump right to the end for now. Let’s say you do all the steps and then the moment comes after you’ve looked at several homes where you decide, “this is the one”
to buy. You discuss things with your REALTOR® and you put together an offer. You’re waiting to hear back to see if you got it but then you get the news that multiple offers have already been submitted and more are coming. What that means is your offer will be compared to several others and it isn’t always just about price. Sellers want to know the offer is good and the buyer will be able to perform. That situation is happening in our market, especially with entry-level homes, and that’s where the market is at both nationally and locally.
The bigger picture nationwide has inventory selling faster than it has in the past. The country is facing a housing shortage, especially for first- time buyers. In some areas, research shows the lowest level of inventory in at least two decades, making it a shortage of historical proportions.
Barb Kimmel, a real estate agent with United Real Estate Solutions and a top producer since 1986, said, “There’s been changes both up and down in that time period, but the market is up 22% in the last five years.” The supply and demand for entry level homes is very real, right here in our local market too. “There is a shortage of homes under $200,000 and those homes tend to sell very quickly, so buyers must be pre-approved and ready to go!” explained Kimmel. All of this makes it good for sellers, but maybe a bit harder for buyers.
What if you are a buyer, but you have a home to sell? Kimmel’s words of wisdom are, “It’s best to put it on the market, subject to you purchasing a property within so many days. This way you can get a buyer for your home and you can purchase the next one subject to the successful close of your current home.” A good real estate agent can show you homes that are available for sale that t your needs and work with their lender to make the transaction go smoothly. “It usually takes 30-45 days for financing, but I just did one with Abbey from Heritage Bank and she was able to get them approved and closed the loan in 2 weeks, A REAL RECORD!” shared Kimmel.
As a BUYER, what can you do to put yourself in the best position?
It’s absolutely imperative to get pre- approved and have your “ducks in a row.” Meet with a good lender who will look at your situation and find the best possible loan program for you. What that means in a competitive market is looking at different ways to structure your purchase so that your offer can be as strong as possible.
Kortney Self is a real estate agent with Keller Williams Siouxland who is passionate about getting the offer done right. “A good REALTOR® and lender will work together to structure an offer that can make yours highly competitive. The terms of the offer are many times even more important than the price,” she said.
A cash offer, of course, will likely have more appeal to a seller than a buyer with financing, but cash buyers are a small percentage of the market. So, if you’re a buyer who needs financing, BE READY! It’s never too early to meet with a lender and find out what that means for you. In fact, the earlier the better! It helps tremendously when the lender can help coach the buyer and it gives a larger window for strategic options with loan programs, down payment options, closing costs, etc.
“Always explore your options when choosing a lender because banks and lenders all have some variation of loan programs and guidelines. Teresa at Heritage Bank has worked with me on many transactions and one of the things I like so much about Heritage is the ability to do FHA loans and qualify first time home buyers for the IFA grant money,” Self said.
If you’re thinking about selling, you can begin that process by getting a free market analysis for your home from a real estate agent. They will look at what other homes have sold for that are most comparable to yours in age, size, features, location, etc. After pulling in those “comparables” and taking in into consideration the uniqueness of your home, the agent will give you the price range they think your home will bring.
As Kortney Self pointed out, “There’s no cost or obligation to get a free market analysis so if you’re thinking about selling your home, it’s a good place to start.”
Why wouldn’t you use a real estate agent? Selling and buying homes is probably the largest financial transactions you will do! Barb Kimmel also pointed out how big of a role a real estate agent has. “It’s not just making sure the home is priced right, we also have to market it to help find the right buyer and that’s just the beginning. When the offers come in, we help work through those offers with the seller, so they can understand the differences, accept the best offer for them and then hold their hand until the transaction is done,” Kimmel explained. “The legal paperwork, alone, is significant!”
What about interest rates?
The interest rates on home loans have been on a climb recently, but historically, the rates are still very favorable. All forecasts and indicators point to increasing rates for 2018. It’s still a really good time to buy a home with low interest rates. The rental market is also extremely high so it is a good time to invest in a home which will allow you to start building some equity. The lenders at Heritage Bank are here to walk you through the process. There is no cost to apply or to meet with them and start developing a good road map to your home purchase. Be ready!
*As published in the April Edition of the Siouxland Women Magazine.