Last Updated on June 29, 2022 by Kathy Rukat Smith
2022 continues to be a sellers’ market meaning low inventory, increased prices and homes selling quickly. How can you be prepared if you are thinking about buying a home in 2022? I have put together 5 tips to help buyers whether they are looking for a primary residence, investment property or second home.
HIRE A REALTOR®️
This market is crazy. I say that at least once per day. Having a REALTOR®️ that works for you and protects your best interests will help you navigate the craziness and make good decisions.
Now more than over, you need to talk to a lender before starting to look for a home. You need to know how much home you can afford.
You also need to decide your comfort level with your monthly mortgage payment, HOA fees and home maintenance expenses. Just because you CAN afford a home does not mean you SHOULD buy up to your limit. Life happens, and you do not want to be in a position that you are house poor.
Having a pre-approval letter from a local lender will help set your offer apart from other offers. Remember, sellers are receiving multiple offers (sometimes 10+).
Changes are coming the the lending world. Fannie Mae and Freddie Mac will soon be changing the interest rates that will be charged on second homes. It’s better to know your interest rate and other terms of your loan prior to getting under contract.
KNOW YOUR TIMELINE
This tip is especially important when you are renting an apartment or need to be in a new home by a certain date because your current home is under contract.
If you are currently leasing, I would suggest starting to look months before your lease ends. You will likely not win the first offer you write and may need to write more than one offer before getting under contract. Closing takes 30-45 days on most home purchases.
If you are selling a home, I would suggest starting to look at homes before you put your home on the market to weed out neighborhoods or areas you do not like and focus on neighborhoods and areas you do like. This way, you will be better prepared when your home gets under contract.
BE FLEXIBLE BUT READY TO MAKE A DECISION
As a buyer in a very strong sellers’ market, you need to be flexible. Sellers may prefer to stay in their home a week or more after closing. They may need the extra time to close on their new home and move. You will need to understand the risks associated with letting a seller live in the home after closing. However, having that flexibility may make your offer stand out to a seller.
When you find a home you like, you need to be ready to make an offer. Most likely, other buyers will be doing the same thing. If you wait too long to make a decision, you may lose on a house you love.
DO NOT WAIVE INSPECTIONS AND APPRAISALS
I know it is tempting to waive inspections and appraisals to make your offer more attractive to sellers.
However, inspections and appraisals are used to protect your largest financial purchase. Use them!! High ticket items like roof leaks, HVAC problems and foundation issues can be found during an inspection.
Appraisals give you an opinion of value from the appraiser to make sure you are not paying more for a property than you should.
Every situation is different so it is important to discuss the pros and cons of your offer terms with your REALTOR®️ and make the best decision for you. If you have any questions about buying a home in 2022, feel free to contact me.