5 Tips For Buyers To Navigate Today's Real Estate Market

With the current seller’s market trends, real estate experts provide home buyers with strategies to make smart decisions.

Buying a home is no walk in the park. When facing a seemingly endless list of unanswered questions, it’s important to do the research and not let fear or inexperience stop you from becoming a homeowner!

The summer 2018 report from Arch Mortgage Insurance points to the overall housing demand exceeding supply with an estimated shortfall of up to 2 million units! This trend is making the market competitive and expensive for buyers all around the nation.

Whether you’re worried about market problems, location trends, varying interest rates or how to set a budget, it begs the question of where do you even start? ESTATENVY spoke with experts to provide their top tip to help buyers get over those initial jitters.

Tip 1: Make a smart and obtainable plan

There’s a lot of factors involved in starting the homebuying process and the first step is to figure out what those are and to make a plan.

“Many people start the process with no idea what they can comfortably buy, have no down payment and have not checked their credit. All of that is essential before you start previewing homes,” said Teresa Cowart, co-owner of RE/MAX Accent, Motto Mortgage and the leader and owner of Teresa Cowart Team. “The absolute worst thing that can happen to me as a realtor, is for a client to fall in love with a home and not be able to purchase it. Almost every home after will far short of the initial dream home. It's like your first love, no other love is quite the same.”

Tip 2: Don’t skip the research

You’ve picked a location, set a budget and feel like you’re ready to go! Well, the research shouldn’t stop there, from cost of living to crime rates - create a tailored list of questions so you can check all the boxes.

“When buying a home, I always recommend that you should always research what the home could rent for in case you can not afford the payments due to loss of job or income. You can easily check the estimated rent on websites like Zillow or Redfin,” said Kurt Tiedt, owner and broker of Titan Real Estate and Investment. “This is important because in case of hard times you’ll want to rent the home to protect your down payment and equity. If your payment is more than 35 percent higher than the estimated rent for your home, then it may not be a safe investment for you.”

Tip 3: Find the right realtor

Buying a home is a big decision and you don’t have to do it alone. Working with a trusted realtor can alleviate stresses and answer all those questions you have flying around your head.

“Your realtor is the going to be the single most important person in your home buying process. It's essential you choose one that has experience and even more importantly, that you feel can feel comfortable discussing emotional and financial issues throughout the process,” said Cowart. “Realtors are a wealth of information. We are happy to share our vendors, lenders, inspections, attorneys and other professionals with you.”

Tip 4: There is no perfect time

When interests rates are high and dream homes are out of your price range, your instinct may be to postpone buying and wait for things to get better. Although, with current market trends, waiting might not be the smartest decision.

“With minimum wage projected to increases by a dollar an hour each year for the next four years, I believe rents will continue to increase, home values will continue to increase at five to seven percent per year and interest rates will continue to rise,” said Tiedt. “Because of this, I would recommend buying as soon as possible.”

Tip 5: The younger, the better

Many millennials grow up thinking of buying a home is something you can only do once you’re established in your career and can afford the home of your dreams. This is a common mistake and benefits increase the sooner you invest in real estate!

“Younger generations do not understand the value of home ownership,” said Tiedt. “There are so many benefits, including that you’ll have a fixed payment, so no more rent increases and every month your loan balance will decrease making it possible to easily pay your home off in 20 years. Also, your home will appreciate. Appreciation is a passive form of income and the equity build-up may end up being your single most valuable asset over time. You can use this as collateral and invest in more homes or even start your own business!”

Whether you’re buying your first home or fifth, it can be intimidating. Although, owning a home is a monumental life accomplishment and with the right knowledge everyone can overcome obstacles and be successful.