On this episode of How To Money, Joel and Matt are tackling the red-hot housing market to figure out if it makes sense to purchase a home right now. Thanks to the pandemic, people’s home spaces have become more important than ever, interest rates are at all-time lows, and many families managed to squirrel away a lot more cash for a down payment, so a lot of people are ready to pull the trigger on a home purchase. To their dismay, however, house prices have shot up considerably, making it questionable if it’s really a good time for such a huge investment. Matt and Joel talk about the reasons why supply and demand have been so affected, and offer some important strategies to keep in mind while you’re searching – and submitting offers – for your dream home.
The prices are high, the guys tell us, because the inventory is low: Many people waited to put their houses on the market until the pandemic was over; lumber prices skyrocketed, adding $25,000 to the building price of a typical single-family home; and building in general slowed as well. Add to that the extremely high demand for homes, and you’ve got a housing market that’s very challenging to get into. But if you have your heart set on purchasing a home right now, there are some things you can do to make sure your offer is the strongest on the table. First of all, before you even start looking, make sure your finances are in order: Your credit score is incredibly important right now with lending standards higher than ever, and it’s important to get a pre-approval letter and proof of funds as well.
They also recommend having a good agent with a lot of experience in your corner. A good agent can not only help you navigate the pitfalls of the housing market, but they can also find homes that were just listed – and with some houses getting purchased within a few days, being one of the first offers on the table can make all the difference. You can also find out what the seller really wants and work that into your offer. For example, if they want a quick closing, submit an offer with a shorter due diligence period. But one thing you shouldn’t do is forgo the housing inspection, Joel says. Even if you’ve purchased a dozen houses, there can often be problems that are invisible to you, and you could end up in a money pit. If you don’t want to have “six figures of buyer’s remorse,” listen to this episode of How To Money for all this great information and much more.
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