Feeling burned out? You’re not alone
If you’re shopping for a home, it can be easy to get discouraged these days. Buyers are feeling the squeeze of low inventory, intense bidding wars, and ever–rising home prices. And it’s not uncommon to have multiple offers rejected before scoring on your dream home.
But that doesn’t mean you should stop trying.
It’s always the right time to buy if you’re ready. It’ll just take extra perseverance in this market.
We spoke with four real estate and mortgage experts to get their tips on staying motivated and winning the home you want. Here’s what they recommend.
Verify your home buying eligibility. Start here (Feb 19th, 2022)
The reality of today’s home buying market
It’s no wonder home buyers are feeling frustrated.
New numbers from the National Association of Realtors and Realtor.com show that, since 2019, average home prices have climbed almost 30% in America. That means a typical property is about $80,000 more costly than it was prior to the Covid pandemic.
Many home buyers who took a break or lost out on an offer over the last year eventually succeeded in buying a home.
Zillow also reports that about 60% of recent home buyers had to take a break from their search, while 72% of current shoppers are doing the same. And nearly every first–time buyer polled by Opendoor (98%) admitted they lost out on a property that they were eager to buy before finding their current home.
Of course, it’s likely none of that is a surprise to you if you’ve been house hunting recently.
But there may be a silver lining to these statistics. They show that many home buyers who took a break or lost out on an offer eventually succeeded in buying a home.
So take heart – and do all you can to stay motivated.
9 Tips to fight home buyer burnout
Fortunately, there are things you can do to minimize or avoid home buyer burnout. Try these tips recommended by the pros:
1. Partner with a reliable, detail–oriented agent who is experienced in your market
“Now, more than ever, it’s important to find an expert who will go to bat for you so that you don’t feel quite as overwhelmed as a buyer,” advises Rebekah Taff, a broker/Realtor with Helen Adams Realty.
“Your agent should be guiding you on how to make your offer as strong as possible and, when an offer is rejected, they should be contacting the listing agent to learn why you were outbid.”
Check out this article to learn more about finding a great Realtor or real estate agent.
2. Don’t solicit advice from too many people
“Don’t talk to too many people about your house–hunting strategies. Family and friends have good intentions and want to offer advice, but it’s best to confide and trust in your chosen agent,” says Dawn Ryan, a senior loan officer with Embrace Home Loans.
Jon Meyer, licensed loan officer and The Mortgage Reports’ loan expert, adds that “Often we see this to be true in that people who are your closest friends and family have opinions, but they do not necessarily know the facts about the market.”
“I’d also refrain from watching and reading about other people’s home buying experiences on social media, which may dampen your spirits,” says Ryan.
3. Don’t overspend and regret it later
Determine a budget and stick to it no matter what, suggests Ralph DiBugnara, founder of HomeQualified.
It can be tempting to keep upping your bids to win an offer. But you may end up overspending on a home – which often leads to buyer’s remorse.
According to Zillow, around 75% of recent buyers have regrets about their new home, whether because they overspent or ended up with a home needing more repairs than they initially thought.
By keeping yourself within budget – and walking away if necessary – you can help yourself avoid regrets later on.
Read this article to learn more about how much over asking price you should offer on a home.
4. Get your financing in place before house hunting
All home buyers should get preapproved for a mortgage loan well before they start home shopping. There are two huge benefits to this.
First, your mortgage preapproval shows you how much you can borrow. That way, you know your maximum budget and won’t get your heart set on a home you can’t afford.
Second, having a preapproval letter ready when you find a home you want will help you move fast on an offer and reduce your chances of losing the home to someone else. Most sellers won’t even consider an offer from a buyer who isn’t preapproved.
Get started on your mortgage pre-approval (Feb 19th, 2022)
5. Coordinate closely with your agent
Make sure your real estate agent is sending you properties that match your needs and wants, recommends Nicole George, owner of Premier Property Solutions Team at Keller Williams Realty.
Your agent should also be aware of your financing plans so they can help push your offer through.
For instance, if you are using a government–backed VA loan or FHA loan, your agent should be well–versed in those mortgages to help quell any misconceptions the seller or seller’s agent might have about your loan type.
If you plan to use a low–down–payment mortgage or any type of down payment assistance, your agent should be aware of that, too, and ready to help you craft a strong offer that can compete with larger down payments and cash buyers.
6. Broaden your territory
“Look outside of areas and property types within your comfort zone, such as a multi–family home or fixer–upper,” Ryan suggests.
Fixer–upper homes can be more affordable than ‘turn–key’ properties. But you want to make sure you’re comfortable with the scope and cost of repairs before signing on. If you decide to go this route, explore your home improvement loan options ahead of time, as there are special loan types to help you buy a fixer–upper and finance repairs affordably.
Just don’t go too far outside your comfort zone. “Be cautious here, as this could lead to buyer’s remorse,” warns Meyer.
You can explore more creative home buying strategies here.
7. Be ready, quick, and aggressive
A worthy property may hit the market suddenly and get claimed within a day or two. That means you need to be in sync with your agent and ready to make an offer very quickly, if necessary.
“In this market, it’s imperative to be as aggressive as possible when you think you found your ideal home. If you are bidding on homes slightly under your budget, you can be more aggressive with your offer,” George says.
She adds, “Try to be creative, too, in sweetening your offer by catering to the seller, such as allowing them to remain in the home a couple of weeks after closing if it would help them.”
8. Know when to walk away
It can be hard to walk away in this market. But knowing your limits will help you avoid serious regrets later on.
Try to focus on variables that you can’t change easily or affordably.
For instance, if you don’t feel comfortable with the home price, the monthly mortgage payment, the size of the home, or the location, it’s likely best to keep looking. But if you don’t like the interior finishes or amenities, that might not be as big of a deal.
In addition, don’t feel pressured to compromise with a seller on points you’d rather not.
“For instance, a lot of sellers are asking for appraisal and inspection contingencies to be waived. A good compromise instead of waiving these rights is to insist on the right to cancel the deal but agree not to hold the seller to any requirements or deficiencies indicated in the appraisal report,” DiBugnara notes
9. Stay the course
Remain patient, even if you keep losing bids. “The more you search in the market, the more you will figure out what home is perfect for you,” says DiBugnara.
Verify your home buying eligibility. Start here (Feb 19th, 2022)
What if you’ve already had multiple offers rejected?
If you aren’t successful in your offers or can’t seem to find a home that matches your budget and needs, don’t despair. Persistence and patience are key here.
“Interest rates are rising, which means the cost to buy is going up. But as inflation has set in, rents have risen even faster,” cautions DiBugnara.
“Continuing to wait on the sidelines or quitting your search could end up being costly down the road.” –Ralph DiBugnara, Founder, HomeQualified
He continues, “The motivation for buyers should center around getting a housing cost that is fixed by purchasing a home and locking in on a mortgage rate soon. Locking in a fixed mortgage payment can save you a lot compared to renting and represent a better value. Continuing to wait on the sidelines or quitting your search could end up being costly down the road.”
Keep in mind that housing prices are expected to continue to increase in the coming years, so the longer you postpone a potential home purchase, the more expensive it could be in the future. And there’s no guarantee that mortgage interest rates will drop from where they are today, which is still within a historically low range.
The bottom line
The bottom line? Keep matters in perspective and don’t give up hope.
“Life can be challenging and not always go as we have planned. There is a lot of uncertainty in this world – just look at what we’ve gone through with the pandemic over the past two years. “But human beings are resilient and can handle these setbacks,” Ryan continues.
“Remember that you are not alone in facing challenges in this market,” she says. “Seek out trusted mortgage and housing professionals who will have your best interests at heart and the knowledge to guide you through the process.”
Show me today’s rates (Feb 19th, 2022)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.