How to Buy a Home in a Tight Housing Market
The home values in the Seattle area are at an all-time high. The median price for a single-family home in Seattle is $777,000 and $950,000 on the Eastside. The Seattle Times recently reported that "Both Seattle and the Eastside have smashed home-price records as the region's market continues to be brutal for homebuyers even before the peak spring season kicks off." The same article also stated that, according to the Northwest Multiple Listing Service (NWMLS), "Home prices grew at least 15 percent in every county in the Puget Sound region." So, how could anyone, who isn't a millionaire, expect to buy a home in this sort of frenzied market? We're here to reassure you that there are ways to buy, and better yet, we have tips to help make the process a little less painful.
First and foremost, we recommend getting a feel for the market yourself before starting to work with a realtor. Start reading up on the market trends and track sales in the neighborhoods you're interested in so that you know which pockets are going to be in your price range. Better yet, you'll get an idea of which areas frequently go above asking. Holden Lewis, a research analyst at NerdWallet, suggests starting to look two to three months prior to when you're actually ready to start making offers.
That first tip also goes hand-in-hand with our second and third tips: get pre-approved and find a good buyer's agent. To get pre-approved for a mortgage basically means you'll work with a mortgage agent to get a lot of the paperwork out of the way ahead of time (which can be a huge time saver down the road and will help you get offers submitted in a timely manner). When you're pre-approved, your mortgage lender will give you an exact idea of how much house (i.e. mortgage) you can actually afford. This will help steer your search in the right direction, as well.
Working with an experienced buyer's agent should be a given these days, considering the market is as fierce as it is, but many people don't understand the need. Many people believe they can simply do their own searching via websites like Zillow or Redfin - which is definitely partially true! A good buyer's agent will instruct you to send them homes you're interested in and will encourage browsing listing websites. However, when the time comes to actually submit paperwork and fight through the legal legwork, an experienced agent will know all the right moves to help move the process along.
A recent article in Forbes suggests offering to put more down initially. "In many markets, a standard deposit with a home contract is 1% of the home's sale price. "If you can put more down than that, offer to do so. Your offer is a lot more attractive if you can make a deposit of 3% or 5%." Lewis says." We would tack on another tip to this idea as well - find out what your seller really wants and then try to make their requests a priority. This can be as simple as just asking them what their priorities are so that you're not making assumptions. If a seller is relocating they may want to close as soon as possible; so show that you're ready and serious (with tactics like a higher deposit) to make your offer more competitive.
One last tip we'll leave you with is that you want to make sure you're always polite and courteous while home shopping. If you're house hunting you should be ready to take off your shoes at the door. Also, refrain from saying anything negative while you're still in the house. The sellers will probably remember the rude comments and being remembered as the kind buyers might tip the scales in your favor.
If you're ready to find your dream house or have any other questions about the buying process, please do not hesitate to contact us.