After more than a half decade of struggles, it appears that the housing market is beginning to recover thanks to a firmer economy, a vast amount of support from the Fed, and investor activity. The sustainability of the recovery is certainly up for debate, but there is no question that if you are looking to purchase a home right now, your choices are limited in many markets where inventory is far less than it was just a few months ago. But for sale by owners are always in supply.
According to the National Association of Realtors, there is only a 4.2 month supply of homes on the market right now, compared to a 6 month supply in more normal times. As a result, it’s nowhere near as easy to buy a new home right now as it was six months or a year ago.
The shift to a seller’s market does not mean that you have to abandon your homeownership plans, however. Here are some tips that can help you find a great home in your chosen market:
- Be persistent. It may sound obvious, but this is the key to finding your dream home. You need to constantly stay on top of the developments in your area and scour the new listings every day. A realtor can be extremely helpful to you in your search. In the recent past it was much easier to purchase a new home without the help of a realtor, but having an agent that will help you out is crucial in a seller’s market.
- Be patient. For most people, a home purchase is the biggest financial transaction they will ever be involved with. I cannot emphasize enough that you don’t want to rush into anything that you are unsure of. Some buyers may be under strict time constraints for finding a new house, but most are not. A great benefit with buying a for sale by owners home is that they can be more understanding and flexible with time. Although, if you can’t find a house for your budget and needs right now, wait. More homes will go on the market as the summer rolls on, and mortgage rates may even decrease if you’re lucky.
- Be flexible. A home that fits your budgets and needs simply may not be able in your target area. Depending upon your time frame for finding a new home, you may need to look further afield to find a house you like. Being looking in adjacent towns to see what else is available. Real estate is intensely local, you can always find homes for sale by owners and it’s possible for there to be a glut of housing in a town adjacent to an area where there is an inventory shortfall, especially homes for sale by owners.
- Get pre-approved by your lender. When you do find the house that you want, you need to be able to move quickly. Getting pre-approved for as much money as possible will give you a leg up on potential buyers who are not pre-approved, and will put you on a level playing field with those who are. You don’t want financing delays to keep you from the home of your dreams.
Buying a home can be a trying experience, particularly in a seller’s market. By following the tips I’ve outlined above, you can alleviate some of the stress that goes along with the process and find your dream home.
Michael Ciocca is a writer for Total Mortgage Services. Total Mortgage is a leading lender licensed in 27 states.