If you’re looking for a starter home this spring, adjust your expectations. With high demand and plenty of competition, prices are rising for starter homes to the tune of 9.6 percent more this spring than last year. Trade-up and premium homes are also more expensive this year—7.5 percent and 5.2 percent more, respectively. If you’re looking for a starter home, consider older or smaller options. Even better, look for a fixer-upper. There are 8.3 percent more fixer-upper starter homes than there were six years ago. That’s good news for anyone willing to put a little elbow grease into their investment.
Don’t get too bummed about rising prices. Compared to historical housing costs, homes today are actually more affordable than they were in past decades. Check out our past blog post on how affordable housing is compared to the past 40 years!
Arrange your financing.
If you wait until after you’ve found a home to start the mortgage pre-approval process, you might lose the home in this market to someone who already has their financing ducks in a row. “You must get your loan squared away and be ready to close in 15 to 21 days, max,” says mortgage adviser Jason Fox.
Want to get pre-approved? Get in contact with one of our lenders today!
To be successful and not make a rash decision, be as prepared as possible before you start looking by knowing the type of home and neighborhood you desire.
Put down a decent amount of earnest money.
The more earnest money you contribute, the more serious you look to the seller. “So on a $400,000 purchase, be ready to put up $7,500 to $10,000,” says Fox.
Be prepared for bidding wars.
In hot markets, buyers should be prepared for bidding wars. Fortunately, bidding wars aren’t always just about money. A shorter closing, willingness to rent the house back to the seller, a super-quick inspection period, and offer letters can help make a lower offer the best offer.
Read the full post at Trulia.
Author: Laura Agadoni