Buying a home in 2022 is being shaped by many of the same issues that have made the housing market wild and woolly for two years.
The impact of a lack of new home construction back in the wake of the 2008 recession is still contributing to there not being a supply of homes that matches the demand, especially with new first-time homebuyers moving in all the time and construction supply shortages during the COVID-19 pandemic.
That being said, you don’t have to opt out just because there are complicating factors – if now is the time to shop for a home, you can absolutely still do it. Just take these wise tips into account, drawn from the Home Light Top Agents Survey in the real estate industry.
Rising Rates Reduce Competition
While no one really wants a higher interest rate on their mortgage, it does come with a nice side effect of cooling down the market. If rates rise but you are still in a position to shop for a home, you may find that more people have opted out for a time, leaving you with fewer offers on the homes you desire.
Fewer offers can help you keep the price you pay under control, and can give you more bargaining power – if your seller only had one other lower offer, for instance, you may be able to ask for repairs to be done to the house or get credits that keep your price down. Total price of the home matters, and if it is a bit lower, that might offset some of your higher interest rate.
Consider Fixer-Uppers With Less Competition
While many homes are getting some kind of offer quickly in the more demanding markets, a lot of the cutthroat competition is for very nice or very new homes. If you are willing to see a diamond in the rough and price out what it would take to renovate it into a dream home, you may be able to get a better price that isn’t escalated by others creating a bidding war.
If You Find Your Gem, Make Your Offer Competitive
When you know, you know, and sometimes, you run across a home that just completely speaks to you, even as a first-time homebuyer. While it is wise to gut-check your feelings with your real estate agent, they may be able to help you really make your offer letter shine. This includes understanding what the expected time to close is, offering any kind of appraisal gap coverage if the appraisal comes back low, and putting down a substantial earnest money deposit.
All of these things show you’ve done your homework, you’re serious about the home purchase, and you’re not just placing an offer that you will then allow to fall through.
Any moves you can make to be fully pre-approved for your loan prior to placing the offer will also sweeten the deal; if you are competing with offers that don’t already have secure lending in place, you’re going to shine.