With the Seattle real estate market defying every housing market trend – a huge problem remains: there are more people looking to buy homes than there are homes available for sale.
With Seattle’s population rapidly growing recently thanks in part to large homegrown businesses like Amazon and Starbucks.
Home values in King County, which is where Amazon is located, have appreciated twice as fast as the national average.
Notwithstanding that the current Seattle market has remained a seller’s market for some time now, Seattle homeowners are still hesitant to sell.
So, what’s a home buyer to do when the market offers them no relief?
There are a few strategies that a potential home buyer can do to not just set them apart from their competition, but help them land the home they dream of.
Follow these home buying best practices and own the home meant for you:
1. Timing is key
a. If you are able to be flexible with your timeframe, let the seller know that you are willing to move as quickly — or as slowly — as they need. If the seller is looking to close their home within 30 days, they won’t be very interested in an offer from someone who won’t be ready to move for 60.
b. Do anything you can do to speed up the buying process and make it easier for the seller. This includes getting a pre-inspection.
c. Get prequalified by a home lender. Pre-qualifying yourself for a loan demonstrates to the seller that you have been vetted financially and details how much mortgage you can afford.
2. Add an escalation clause to your offer
If you want to compete with multiple offers on a home, the best weapon you’ll have in your offer will be using an escalation clause. This will help the seller measure how much more you are willing to pay over another competing offer.
3. Make it personal
When a home seller faces multiple offers, receiving a personal letter from a home buyer can help set that offer apart. Yes, many sellers will just go for the highest bid. However, if the home seller has an emotional attachment to the home, pulling at their heartstrings might just help you land the property.
4. Cash still talks
Make your offer irresistible by contributing more money up front in the earnest money deposit. Earnest money is cash provided by the buyer, ranging from 1% to 5 % of the purchase price, that gets held in escrow until the sale finalizes. Earnest money usually acts as insurance for the home seller in case the buyer backs out of the deal.
Were you able to purchase a home in a seller’s market? Share your experiences in the comments below!
Flowers are blooming, spring is in the air, and the housing market is as active as ever. Take a look at these three great reasons why you should consider buying a home during spring.
Home Prices Will Continue To Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.6% over the last 12 months and predicts that prices will continue to increase at a rate of 4.3% over the next year.
Just to give you perspective, on a $400,000 dollar home that’s around $17,000!
With home prices continuing to appreciate in value, waiting no longer makes sense.
Mortgage Interest Rates Are Predicted to Increase
Freddie Mac’s Primary Mortgage Market Survey noted that in 2017, interest rates for a 30-year mortgage hovered close to 4.0%. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors, all agree in forecasting that rates will increase by nearly a full percentage point by this time next year. Once again, driving up the cost of purchasing a home.
Pay Rent Or Pay Mortgage – The Choice Is Yours
Unless you are living somewhere rent-free, you are paying a mortgage – either yours or your landlord’s.
As a homeowner, your mortgage payment can act as a form of ‘forced savings account’ that allows you to have equity in your home with which you can tap into later in life. As a renter, you’re helping your landlord gain that same equity.
If the right thing for you and your family is to purchase a home this year, buying one sooner rather than later could lead to substantial savings.
If you’re a first time home buyer, consider reading my top first-time home buyer tips!
Ready to take the first step and own the home meant for you? Get in touch
- Historically, the choice between renting or buying a home has been a close decision.
- Looking at the percentage of income needed to rent a median-priced home today (30%), vs. the percentage required to buy a median-priced home (15%), the choice becomes obvious.
- Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!
- Renters now account for 37 percent of all households, the highest level since the mid-1960s, according to the Joint Center for Housing Studies of Harvard University.
The arguments for ownership are compelling, especially for individuals who expect to stay in place for at least five to seven years but probably more. A mortgage acts like a forced savings plan, even if you’re paying the bank hundreds of thousands of dollars in interest for the privilege of building equity.
The purchase of a home can be an excellent investment if done correctly and with a solid financial plan. If you currently don’t have an emergency fund, make it a goal to build one.
Here’s how you can start:
Open a savings account.
For an emergency fund to be beneficial, it must be useful. Tap into your 401(k) for home repairs or renovations, and you’ll face substantial early-withdrawal penalties. Store your emergency fund in a savings account, that allows you to access your money simply and for free.
This account should be separate and different from one where you’d save for short-term goals, such as a vacation or a similar type of expense.
Start small but keep saving.
An emergency fund that’s too tiny won’t be able to cover life’s unexpected moments. Dealing with a challenge such as a sewer pipe problem, for example, could potentially set you back financially or worse, create debt.
Establishing an emergency fund that’s too large has its own drawbacks as well. With more buffer than necessary, those extra funds will earn little in interest in a savings account when they could be building assets faster in investments or paying off high-interest debt.
To find the perfect savings spot, aim to start with $1000. This amount could be enough to keep you from having to take cold showers if your heater breaks and provides a financial cushion if any other household problem were to arise.
Once you have these funds established, continue to add money to your safety net, so that you’re prepared if bigger crises were to happen, like losing your job or a reduction in household income.
Start by building up a fund that would potentially cover living expenses for three months, then work up your way up to six months.Figure out exactly how much to save by determining your monthly payments for electricity, heat, water, food, rent, health care, home mortgage and other necessities. Multiply the sum of those costs per month by the number of months you’re aiming to cover.
This method isn’t a perfect science, given that everyone’s situation is different. Depending on your home life and circumstances, you may want to save for a larger reserve.
Once you’ve established an emergency fund that covers up to six months of essential living expenses, focus your savings towards retirement and debt repayment.
Buying a home can be an incredible investment if your finances are in order. Start saving today; your future self will thank you.
Preparing to buy a home can be daunting. Credit scores, down payments, and mortgages are all on your mind. Here are a few best practices to help you get ready to make one of the biggest investments of your life.
1. Review Your Credit
Know what your credit score is? If you don’t visit annualcreditreport.com and request your free credit records from all three credit reporting bureaus: The TransUnion, Equifax, and Experian. For a small fee, you can also get your credit score.
First up, check the reports thoroughly for any errors that need correcting and/or any negative records they may contain.
These reports should also indicate what you can do to improve your credit. Remember, the higher your credit score is, the easier it is to qualify for the lowest interest rates available, which in turn make your purchase more affordable.
It is a good practice not to finance anything that may potentially hurt or damage your credit before you buy a home.
2. Become Financially Ready
Become financially ready to purchase a home by planning ahead. Save up for your home down payment of at least 20% of what your expected home budget will be and establish an emergency fund for any unexpected expenses.
Not only will you need cash reserves to buy a home, but you’ll also need to prove to a lender that you can afford housing payments that may be higher than what you’re currently paying in rent.
3. Earn Extra Cash
If you’re low on cash, as most first-time buyers are, consider taking drastic steps to cut spending. Or try out some ways to increase your income, such as selling some of your stuff or taking a part-time job.
4. Home Wishlist
Narrow down what home features matter to you most such as home style, size, and preferred location. Use your wishlist to also decide on lifestyle choices like commute times, public transportation, and any other lifestyle options that are important to you.
Look for homes that align with these lifestyle choices.
5. Start Looking At Neighborhoods
Unless you already know where you want to live, take the time to visit a variety of potential neighborhoods. You’ll want to scout out ‘hoods that meet your needs regarding transportation options and other amenities. Exploring different locations will help you narrow your priorities.
6. Investigate Down Payment Assistance Programs
Visit Down Payment Resources to learn about programs in your area that may help you find down payment money or a low-interest loan.
7. Get PreQualified
With prequalification, You’ll receive a commitment in writing from a lender for an exact loan amount. Not only will this help you save time and heartbreak by giving you piece of mind to what your home budget will look like, you ae able to use it as a negotiation tool with home sellers as it shows you are just a step away from acquiring a loan.
When buying a home, there are best practices you can follow to make the process run smoothly and efficiently. Own the home meant for you.
Plan your way into the perfect home
Where do you start a home search? With so many steps to take, processes and approvals, the journey could be overwhelming without the right tools and resources on your side.
This guide is full of useful home buying tips and a handy checklist to help you get started in the right direction. Use this practical resource on the first steps of buying a home– getting started. This means evaluating your buying power: estimating costs, determining your budget and reviewing your financial standing. If you know what you can afford- you can view houses in your range that might be just perfect for you.
Have more questions? Feel free to reach out to me. I am here to help.