The reality is, if you plan to buy your first home in 2021, the process will possibly take months instead of weeks, and you might feel frustrated at times during the process. If you have the expectation you’re going to have emotional highs and lows, it’s simpler to shrug off these lows and carry on.
Just know that investing in your starter home will be challenging for first-time buyers in 2021, but here’s how to handle them.
The Reason Why It’ll Be Difficult
The housing market is in short supply because buyers take advantage of any available homes. First-time home buyers are competing against professional landlords, renters, trusts, and the average home buyer.
1.2 million existing homes were available for resale last October, inadequately meeting demand.
The National Association of Realtors (NAR) estimates it would take 2.5 months to sell every home on the market that month — the lowest rate in history.
Have Realistic Expectations
The time it takes for you to get your credit reports to the home’s final closing is likely to be a while.
To prepare mentally, emotionally, and financially for homebuying, first-time buyers must understand that buying a home typically takes five to eight months. First-time buyers often burn out if they expect it to take a month.
It is true that everyone wants a bargain; however, shoppers must re-calibrate the context of the word to suit today’s business environment.
Be Able To Compromise
The 2020 Home Buyers and Sellers Generational Trends report from NAR indicate that more than three-quarters of homebuyers between 20 and 30 made compromises. Most of the compromises were based upon the type or cost of the home.
Perhaps start by making a list of everything you need and what you won’t budge on before you start looking at homes seriously. You might have a minimum size requirement, a maximum price requirement, a commute time requirement, etc.
These conditions are deal-breakers that you should not compromise. It’s wise to consider re-thinking everything else, though, or else you may never find a home in this market.
The Market Requires Fast Decisions
The market for houses is competitive in today’s market, so it’s critical to make an offer on a home you love as soon as you see it.
You can refer to your list of deal breakers as a guide to speed up this process. If the home you have spotted meets your criteria and the price is acceptable, then you might want to make an offer. Pounce fast because most sellers receive multiple offers in the first day or two after placing a for sale sign on their lawn.
It’s Not Personal; It’s Business
New buyers will likely be rejected multiple times when making offers. People may get discouraged or feel worthless as they get an offer after another offer rejected.
Understand that the seller’s decision is a business decision, so don’t count on having your first offer accepted.
Don’t Celebrate Too Quickly
So your deal was accepted by the homeowner? That’s awesome! Just remember that the lender’s appraisal and the home inspection follow, both of which can spoil the deal.
Suppose you are excited about getting a thumbs-up from the seller after the inspection. In that case, you’ll probably be disappointed if you have to reject the deal if the appraisal or inspection comes back negative.
Nothing is done until the hen comes to roost, so to speak.
Make The Offer Attractive To The Seller
It’s a good idea to have a pre-approval letter from a lender so that the seller doesn’t have to worry about you being denied. Another good strategy is to keep the inspection and appraisal period short to allow adequate time to relist it if something goes wrong. A good real estate agent can help you through this entire process.