Spring / Summer Home Buying Guide
Home buying season is here! Yes, there is a season for home buying. The US housing market has strong seasonal variations: sales drop in winter and build up strongly in spring, peaking in May and June and remaining strong until August, when they taper off.
It's easier to shop for houses when the weather is good, and people prefer to move when the weather is warm, and the kids are on vacation.
Spring and summer are good times to be shopping. With the beautiful weather, blooming flowers, trees full of leaves, green grass, and light atmosphere, houses look a lot better. Sellers deliberately wait until that time of year to put their properties on the market. The sudden influx of homes for sale can drive the market crazy, making it a great season to find your dream home. Of course, buyers are also plentiful, meaning that you may not be the only person who wants to place a bid on your perfect home.
Here are a few tips and strategies that help you snag the house you want for a good deal.
Know Your Market
Knowledge is power. Knowing the housing market will give you a good idea of what is overpriced or underpriced. It's hard to negotiate if you've no basis for your pricing opinions. You might end up paying more than a property is worth, or turning down a fantastic deal because you think it's too expensive. Remember that real estate is a local business, and each local market has its trends and characteristics. Read your local papers, talk to brokers and agents, check ads, even old ones. The ads will give you a sense of the going price for different types of property. Know the different neighborhoods, which ones are considered desirable and why.
Know What You Need
You can't get what you want if you don't know what you want. We all know that, but many people still start hunting for houses without a clear view of their needs. Start with a budget: how much do you want to spend, and how high are you willing to go if you find something you want? Know those figures and be wary of changing them. Know the size and type of house you need, how much space you want around it. If you have kids, look into schools and transportation arrangements. Think about access to work, because that will be with you every day: the right house in the wrong place is not necessarily a good deal!
Make a list of your primary criteria, and note what is negotiable and what isn't, and how far you're willing to bend on each point. Think about it, talk about it, and be sure it reflects what you need and what you want. Knowing these details will help you narrow down your search to a limited number of locations and a limited range of homes in those areas. You will spend less time looking at properties that won't suit you anyway.
Get a Broker
The internet is an amazing tool. All the information you need to compare house prices, check out the local schools, and see what the area has to offer is right at your fingertips. As useful as the internet is, though, it can't replace street-level knowledge and personal contacts. Experience is a very valuable thing, and it would be a mistake to underestimate the kind of advice an experienced broker --also known as a buyer's agent – can offer. While some real estate agents can wear both hats, representing both seller and buyer, you might find it more comfortable to work with someone who acts as a buyer's agent only and works just for you.
A broker/buyer's agent will have real-life experience and knowledge of the market trends in the area you're house hunting. Hiring this trained professional, who can spot circumstances that affect a property's price, ranging from a foundation issue to a zoning change, is invaluable and may save you from a world of hurt.
Here's a little secret: not all listings are online for public viewing. A broker might know about and have access to such listings. Some privacy-minded sellers don't want their house on public display. There could be some sweet deals on great places, but if you don't have a professional working for you, you'll never see them.
If you're going shopping, you need to be ready to buy, and you need to be ready to make a credible offer if you find the right property. There are likely to be other bidders, and if you can't supply verified information from your lender, bidding on a home is not likely to go in your favor. You're a much more reliable looking buyer if you can show that you are fully qualified to make the purchase. Talking to lenders ahead of time and beginning the approval process will put you in pole position if a bidding situation comes up.
When you start talking to lenders, you'll be looking at either a fixed-rate or flexible rate mortgage. Your best bet is a fixed-rate loan. Flexible-rate mortgages can often boast rates as low as 3%, which seems irresistible but there's a huge chance you'll end up paying significantly more at the reset date! The only time a flexible-rate loan would be a good option is if you intend to stay in the house for less than ten years. That way you can benefit from low ARM rates and get out before they spike.
: If the market is highly competitive, offering more than the standard 20% down payment can get you ahead of the pack.