Tips for Successful House Hunting in 2021
Learn how to successfully buy the home of your dreams in 2021—seller’s market or not
n November 2020, the National Association of Realtors found that homes are only staying on the market for an average of 57.5 days.
Between a mass of people relocating during the pandemic—a whopping 22%, according to Pew Research—and the homeownership rate climbing to 67.9%, according to the Census Bureau—inventory for buyers has been low. Really low.
The numbers indicate that these low inventory levels are likely to trail well into 2021, especially as interest rates remain at an all-time low.
So if you are looking to buy your home in 2021, how can you get ahead of the competition?
There are a few key things to consider before you dive into the home buying process, especially with a limited number of homes on the market and so much competition.
Let’s look at some tips to successfully house hunt in 2021.
Tips for House Hunting in 2021
Despite a very competitive market for home buyers, there are some tips for getting ahead and preparing yourself to successfully buy a home in 2021—seller’s market or not.
- Get pre-qualified early.
Obtaining mortgage pre-qualification accomplishes a few things.
For one, pre-qualification gives you insight into just how much house you can afford. If you don’t have an idea of your monetary limits, you may be wasting your time looking at listings or attending open houses you simply can’t afford.
Getting insight into the extent of your buying power will give both you and your agent clarity as to what houses you should be looking at. This is especially important in a seller’s market, as competition is fierce and many homes are going above asking price.
Second, many real estate agents will only work with buyers who are pre-qualified. This saves all parties time and energy as they move through the home-buying process.
Getting pre-qualified for a mortgage shows both your agent and the seller that you’re serious.
The good thing is, pre-qualification can be a fairly easy and fast process, as long as you have your financial records in order. So gather proof of income and employment, which is usually in the form of tax returns, W2s, or 1099s. Bank statements, retirement and brokerage accounts, and monthly debt payments are also good to have at the ready.
Pre-qualification and pre-approval are different, but please integrate the pre-approval info into this as well. (I will email the pdf)
- Do a credit checkup.
Be sure to give your credit a thorough checkup before you begin your house hunting process. This will provide insight into anything that will need to be addressed before applying for a mortgage. You can get a free credit report each year from: www.annualcreditreport.com/
Why is your credit score so important when house hunting?
Mortgage lenders want to know you won’t default on your mortgage. If you have poor credit, your lender will likely consider it risky to approve you for a mortgage.
Your credit score also affects your interest rate. Because there’s more risk to worry about, the lender has the power to charge more. So poor credit can mean increased monthly mortgage payments—and who wants to pay more than they have to?
Our loan officers can help you identify and address any potential credit issues with tips or connecting you with a credit repair company.
- Separate your “wants” from your “must-haves.”
The market is hot, and buyers are being forced to compete in order to land the houses they want. So while you may already have a very specific wishlist about your dream house, consider narrowing down your list of non-negotiables.
While clarity about what you want in a property is important, it’s also important to balance your expectations with the current state of the housing market. With inventory levels at an all-time low in many markets, buyers are lining up to make offers.
To put this into perspective, national home inventory declined by 39.6% over the last year and fell below 700,000 homes for the first time, according to Realtor.com.
So being flexible about what you really need will increase your chances of landing a house that’s right for you.
- Know which mortgage matches your needs ahead of time.
Get in touch with a mortgage lender ahead of time to clarify your mortgage needs. Your lender will help you assess your finances and your home buying goals to find the loan will best suit your unique situation.
When looking at your finances, figuring out how much money you have readily available for a down payment is always a good idea. There are several different types of loans with down payments ranging from 0% to 20%. Understanding what is feasible for you will provide clairy for both you and your lender about how to move forward.
Knowing which type of mortgage loan is right for you is also important. This information will give you a competitive advantage and help calculate your monthly payment and overall budget.
Set Yourself Up for Home Buying Success
In today’s market, it pays to do your home-buying homework in advance.
Low inventory and record low interest rates means competition is hot, and taking these 4 tips into account before you begin your house hunt in 2021 will give you an advantage. You’ll also demonstrate to your lender, your real estate agent, and the seller that you’re committed and prepared.
Looking for assistance obtaining pre-approval or more information about what kind of mortgage loan will work best for you? Our highly experienced team of loan officers at Graystone Mortgage is standing by to help.
To speak directly with one of our experienced mortgage professionals, call us at 801-893-0844 and learn more.
We look forward to working with you.