How to Buy a Home in 2021

If you are looking to buy a home in 2021, whether you are a first-time home buyer or any potential homeowner, it’s more important than ever to be prepared. With record low inventory, the market is the most competitive we’ve seen in years. With that said, you can still win. Multiple times a day, we are congratulating clients on their offers getting accepted.

Here’s what you can do to put yourself in the best position to buy a home this year.

Know What You Want

The first thing you’ll want to do is identify what’s most important to you in your new home. This includes defining where you want to be, why you want to go there, the price you are willing to spend, and the house type you want to live in. Obviously, when inventory is lower, casting a wider net will give you more options. The good news is that, with the increase in telecommuting and work from home flexibility, many buyers may now have more options if they are no longer tied to a daily commute. People are now able to move further out from the cities, which generally helps increase affordability.

A good place to start is to make a list of your must-haves, your nice-to haves and your deal breakers. This will get you moving in the right direction of finding your home.

Pick Your Team

This is the most challenging environment in years for homebuyers due to low inventory, low rates and increased demand brought on by high motivation to move. It’s more important than ever to work with an experienced and talented real estate agent, attorney, lender, home inspector and financial advisor. Having a team of experts that are going to support you and give you great advice is important. And having those people lined up in advance will best prepare you when it comes time to make an offer.

Of all of these experts, having an excellent realtor is the most imperative. They are going to give you advice, have information you wouldn’t otherwise have access to and know about ‘coming soon’ and ‘off market’ listings. They will also have negotiating skills and relationships that will play a major role when it comes time for you to submit an offer. Most of my clients that end up overpaying for a home, have prolonged home searches or don’t have success in getting offers accepted either try to do it on their own, try to do it online or work with an inexperienced agent. My clients that have the most success, get the best deals and have the shortest searches are working with the best real estate agents out there.

Get Pre-Approved

Next, it’s important to get pre-approved for a mortgage. This entails a lender evaluating your credit, income and assets. In return, you’ll receive a pre-approval letter to submit with your offer and information on the financing for a home. Your lender will give you a budget for your payment including all of the factors that are included the mortgage such as home insurance, property taxes and PMI. Your lender will also help you budget for your down payment and other out of pocket expenses like closing costs. Your lender may also give you some advice on things like how you can improve your credit scores, which you’ll want to be as high as possible so that you can qualify for the best mortgage products and rates.

With the recent increases in conforming loan limits, this gives buyers the ability to buy more house with lower down payments. Typically, the best mortgage products available are the ones that are insured by Fannie Mae and Freddie Mac, so with their recent increase in loan limits, this is a good thing for new buyers. There’s also many great jumbo loan products out there with super low interest rates as well. As home prices have continued to increase, its important to work with a lender that has access to those products as well.

Know What To Expect

Last, you’ll have a smoother home purchase process if you know what to expect along the way. What does the realtor do? How do you stay in touch with your lender? What happens when you get your offer accepted? What does the attorney do? Having a road map like this one will help you eliminate stress and anxiety because you’ll have a solid understanding of the process and will be prepared for each step.

Although the current home buying environment is competitive, it is still a great time to buy. Interest rates have decreased faster than home prices have gone up, which makes affordability better for buyers and actually gives them more purchasing power.

Additionally, since inventory is low and demand is high, home prices are expect to appreciate 6% in 2021. 

Buying a home is a big task to tackle at any point in life. But if you follow these tips, you’ll enter the journey prepared, confident and ready to find the home of your dreams.

Get started today at www.shantgr.com or email shant@rate.com for a pre-approval consultation.