It is a tough market for first-time buyers out there. With very little inventory, well-qualified buyers, and those putting thousands of dollars down, first-time buyers barely stand a chance. But there are things that they can do to give themselves the best chance possible in getting a home right now.
Here are eight things first-time buyers can do to increase their chances of getting the home they really want.
#1. The pre-approved for a home loan – well preapproved.
This is more than simply thinking you can afford a monthly mortgage payment. This is sitting down with the lender and having them go over all of your credit history, score, income, debts, assets, and liabilities to give you a more precise number of how much you can afford. Sellers want well-qualified buyers right now and first-time buyers can help their cause by being as qualified as possible.
#2. Shop for the lowest mortgage.
The median home sale price has increased 17% just since last year, the largest gain in five years according to a real estate report. Saving money anywhere you can is definitely a benefit so shop around for the best mortgage, loan, and mortgage officer. A general mortgage officer or mortgage advisor can offer loans from all different types of mortgages whereas a credit union or bank will only offer their own. Let everyone know your shopping around so they give you the best rates.
#3. Work with an experienced real estate agent.
You need someone that knows how to negotiate for first-time buyers. Having someone that is knowledgeable about today’s sellers market is really the key to getting an early, great communication, and getting your offer accepted.
#4. Customize your offer.
This doesn’t necessarily mean writing a personal letter to every seller but it does mean communicating with the listing agent and the seller on what is motivating the seller to sell. As a first-time buyer you can play on their motivations, give the seller exactly what they want whether it’s terms, time, or price, and guaranteed that you’re working with the seller, not just throwing an offer out into the universe.
#5. Consider waiving contingencies.
This can be a tricky one. You may need financing before buying, and you may want to have an inspection before finalizing. An inspection can definitely be done after you’ve closed on the home but financing might be inevitable. It can be a little risky considering you might need to scramble for financing if financing falls through, but talk to your real estate agent about the best contingencies to waive and how to approach contingencies with the seller.
#6. Expand your search.
You may want to live in a specific neighborhood but if there are simply no homes or you keep getting rejected, you may need to expand your search beyond your desired neighborhood. You might be surprised at what you’ll find getting a little bit out of your comfort zone.
#7. If you need to sell first consider renting.
This probably is not ideal for first-time buyers since obviously, you are a first-time buyer, but if you currently own a home, you might consider selling first, renting for a while, and then buying when the market calms down a bit.
#8. Make an all-cash offer if you can.
I know, I know… Almost impossible for first-time buyers, but if you can, you have a better chance of being accepted over one that has financing. Sellers typically prefer all-cash offers and they can close more quickly since there’s no need to wait on an appraisal or loan approval. You can also offer more than the asking price without an appraisal, guaranteeing that you get the home. But again, this is a risk as you might find yourself upside down should you choose to sell the home quickly.
There are ways to get the home you really want but it does take communication, great negotiation skills, and a little bit of finagling to set up everything in the right way. If you are tired of missing out on homes in Portland, contact our office. We have expert negotiators that understand the market and can help you get the home you really want.
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