Strong job growth, historically low interest rates and low inventory will create another frenzied real estate market in 2016.
Q: We’re venturing out of the world of renting and looking to purchase our first home. Oh, and we have no idea what we’re doing. Can you help?
A: If you live in the Puget Sound area, you already know how crazy the market was in 2015.
Buyers were jostling for fewer and fewer homes. If you weren’t successful in buying a home last year, or if you are new to the market, don’t expect things to be any different in 2016. In fact, strong job growth, historically low interest rates and low inventory will create another frenzied market this year.
What can you do to make sure you are successful in buying the perfect home? Find the right real estate broker and make sure you’re “buyer-ready” from day one by working with a trusted mortgage professional.
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“Finding the right broker can make or break your homebuying experience,” says Jon Hunter, vice president of residential success for John L. Scott Real Estate. “Make sure you interview candidates and ask them what their take is on negotiation techniques, market knowledge, strategy, brand support and communication. If their philosophies and techniques match what you’re looking for, then you have the right formula for a strong buyer/broker relationship.”
Here are Hunter’s top five categories explained.
Negotiator. The ideal broker will know how to use forms to position your offer while keeping your best interests in mind. For instance, we teach brokers that it’s not always about price. Sometimes it’s about closing on time, fewer contingencies or just winning the home!
Market knowledge. Your broker should have a firm grasp of what’s going on in the area, neighborhood and city you are interested in.
Strategy. Your broker should be able to define a strategy with you. If you are looking to win in a multiple-offer situation, your broker should walk you through the best possible way to achieve that goal and have an arsenal of strategies you can use to win.
Brand support. You want a broker that is supported by a trusted brand, with marketing and technology services in place to help manage and support your transaction.
Communicator. Not everyone loves to email. Or text. Or talk on the phone. You want a broker that can communicate with you in the medium that you prefer. “Time is of the essence” is a fundamental contractual term to which you must adhere; therefore, your broker needs to be extremely communicative with you to ensure a smooth closing.
Eric Dallas, a mortgage advisor with Priority Home Lending, LLC, says the best advice he can give clients is to get all of their financing together prior to looking for a home.
“There’s nothing worse than finding the perfect home and losing it because you weren’t able to submit a pre-approval letter,” he says. “In this market in particular, if you want to compete with other homebuyers, you have to be prepared.”
Here are five things Dallas thinks are important in being buyer ready.
Get pre-approved. Get pre-approved before you start looking at homes. It is very important to speak with a knowledgeable lender and submit all the items necessary to get a full approval. This is key when determining your price range and that the loan programs offered meet your needs.
Review your credit. Oftentimes we see errors that are being reported that can take some time to get cleared up. It is always best to get a copy of your credit report before starting the process to determine if there are any items that that you need to address. You can request a copy of your report by visiting annualcreditreport.com. This is the only site that is authorized by the Consumer Finance Protection Bureau to provide you with a copy of your report, and it is free to use.
Determine your monthly budget. Although you may qualify for a higher payment, it may not fit into your life. We all have areas that are important to us, whether it be saving money for college, retirement, vacations, club memberships, etc. It is important to be able to not put your plan at risk by buying too much home.
Stop spending. Don’t make any major purchases or apply for new credit. These items can affect your loan approval and credit scores.
Stay put. Don’t change jobs, quit your job or become self-employed if you were not already. You want to be as stable as possible when buying a new home.
Kellee Bradley is the public relations manager at John L. Scott Real Estate in Seattle and a member of the Master Builders Association (MBA) of King and Snohomish Counties. If you have a home improvement, remodeling or residential homebuilding question you’d like answered by one of the MBA’s more than 2,800 members, write to firstname.lastname@example.org.