Uncertain how to buy a home in this real estate market? Not just first time home buyers are having issues with how to get into a home. Seasoned home owners, people that have owned homes their entire life have been challenged with a lot of unanswered questions.
In the past homeowners and first time home buyers would start by looking on the internet, finding homes they liked, talking to an agent. Your agent helped you find loan persons that fit your needs. Your agent sent you homes that would fit your budget. Start scheduling to look at homes, find a home that works, make an offer and go into escrow. Not exactly that easy, but an easy summary.
That unfortunately is not how it works now, we have always had hot seasons and hot years. Certain highly desired neighborhoods would sell fast or be difficult to get into. Right now almost every neighborhood is a hot selling neighborhood. Fueled by low interest rates saving buyers money with lower monthly payments and more purchasing power.
We have over 75 million Generation Z’ers, and Millennials in the united states making up a high number of soon to be homebuyers.
“88% said they are confident they will achieve homeownership someday.”
With 2000 of them surveyed here is some of the results:
- <50% say they want to use their home as an asset
- 78% believe it’s the best way to live the way they want, without restrictions
- 80% believe homeownership is the best way to make it on their own
The other consideration when looking at homes in Arizona is that we are a positive population growth state, While California is a negative population state, the kicker is that the California buyers are coming to Arizona with a ton of cash from selling their crazy high priced homes in California. They see our prices and think nothing of outbidding another offer by 10k, or even 20k. Waiving appraisals.
Two main challenges potential homebuyers face today is 73% of homebuyers are unaware of low down payment mortgage options. Even zero down payment programs still exist! 64% of buyers expect lenders and real estate professionals to inform them about the process.
Fannie Mae also notes:
“Among the challenges they face is an unprecedented amount of debt, along with a lack of understanding of the mortgage process and their own purchasing power. Debt, in particular, creates many obstacles such as a limited ability to save and the fear of taking on more debt.”
With over 2000 down payment assistance programs available to help home buyers. Understanding that you don’t need a huge down payment can help. When this market cools down we will see a ton of people with low down payments come to the market and purchase a home successfully. This is still possible in this market! We just helped a client with buying a new home that needed down payment assistance!
The good part of this market is the mortgage rates, and if you are currently a renter this can save you money, and force you to build equity every month as you pay down your mortgage. And hopefully the home also goes up in value by the time you are ready to sell giving you even more equity.
If you are an experienced home owner / buyer you can see that not only are we a high population growth state, but your competition is also renters pushed into buying by high rental prices, and renters seeing the savings by purchasing.
Today's home buying challenges include finding a home, low inventory, has been one of the biggest challenges this year. This can be overwhelming, and tiring. Looking at homes making offers and finding out your offer was out bid by thousands of dollars.
Some other creative ways to overcome this is to make sure you talk to us, let us know your must haves, we are good about helping you make strong offers, and following up on those offers after they have been declined. With this market a lot of homes are listed without being repaired or even cleaned up.
We see a lot of homes fall out of escrow. So one of the many things we do is stay in touch with sellers agents until we know the inspection period is over. Let them know we are still interested in the home.
Another way to overcome this is to not only have homes that are just listed sent to you by us, but also have us send you a search for homes with high days on the market. These little gems still exist. Most of the time you have an unrealistic seller overpricing a home. Or maybe decor that is outdated, and of course the home may need repairs that don’t justify the price the seller wants.
These high days on the market homes can be easier to get into than homes that just hit the market at market value, and then get bid up. All the agent needs is a reasonably priced offer that they can bring to the seller and explain why it is lower than the asking price.
These are just a couple of suggestions that we can help you with. Don’t be discouraged, home buying can still be fun, we can help you learn about the home buying process and give you any guidance you need in this market.
Photo and statistics from kcm and Fannie Mae