As home prices rise, here's what you can do to land that deal!!!
According to the last trimester data report from the Institute for National Statistics (INE), with record home values on the rise (13.2 percent year-on-year), here's seven tips on what you can do to win the home you want!!!…
With very low inventory at the moment with quality homes at competitive values at your disposal you may be currently struggling to find a home, but keep in mind that you are likely to see improvement in the number of choices available, as more sellers may list their homes after the summer holidays as well the number of new construction developments under way…
With that said, the market is still very tight!!!
“I have been in the business for more than 20 years and I have never seen a market that has been this hot!!!”
I recommend potential buyers take a pause and do a little soul searching…
Take a look at your income stream; your employers; the location you are considering buying a home and make sure that the stability of your personal situation is one that warrants homeownership.
If you are ready to buy, here's my seven tips on how to navigate the market right now…
Figure out your number
The first thing I ask my clients is what they are paying in rent and if that is okay for them.
Come up with a number first… What you can afford is going to guide not just your principal and interest payments, but taxes and insurance payments!!!…
Review your existing expenses and debt. There will also be additional costs to consider, like property taxes (IMI), possible homeowner association fees and a likely boost in utility costs.
Work with a REALTOR®
Part of your due diligence includes finding a REALTOR® who is experienced in both buying and selling homes. They should also have a strong knowledge of the local community and relationships with other realtors in the area.
“You want them to be able to negotiate hard and know what makes a competitive offer in that Region or City"
In Portugal there are real estate agents and there are REALTORS®… The following post will inform you of the differences between them!!!
Always look for the R®!!!
Do your homework
Start looking at listings online, including doing virtual tours, even if you aren't quite ready to begin the process yet. It will give you an idea of Regions or Cities you like that are within your budget.
Setting up alerts from real estate websites will also let you know when new homes hit the market in those areas.
A good knowledge base will help you make an educated decision in a short period of time, which is crucial when homes aren't sitting long on the market.
As you see homes you like, you can figure out your monthly payment based on the down payment and cost of the house by using a mortgage calculator, which are offered by lenders.
Work with a loan broker
Get pre-approved for a mortgage!!!
A mortgage pre-approval will give you a sense of the amount you are qualified to borrow, what your interest rate will likely be and the amount of your monthly mortgage payment.
"The only person responsible for your budget is you!!!"
However, just because you are approved for a certain amount doesn't mean you should spend that much money.
Getting an edge over the competition
To win over a seller, try to form a relationship with them. That can range from writing a heartfelt letter or having your REALTOR® paint a positive picture of you as a buyer.
"If you can connect on an emotional level with the seller through the REALTOR® it will make a difference!!!"
First-time homebuyers may have an advantage
If you are not depending on the sale of a previous home to buy the new one, and have flexibility on when you can move in, one option is to rent the home back to the seller while they look for their new home.
While some buyers are waiving inspections, I would never recommend that tactic since an unexpected repair can put you in a financial bind!!!
Waiving an Appraisal Contingency
If you have the ability to handle a larger down payment, you could waive the appraisal contingency, which allow you to back out if the home is appraised for less than the purchase price. Your mortgage amount will decrease and you'll have to make up the difference.
Talk to your REALTOR® about the specific situation and really make sure you understand the risk.
“Removing contingencies is not something that everyone should do!!!”
In the end, the winning bid usually offers the most money or all cash.
Just don't let a bidding war lead you to offer more than you can afford.
"It doesn't matter what the highest bid is and whether you can beat that, if you don't have the money!!!”
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