You've probably been hearing a lot about the housing industry lately. You've been hearing about Federal interest rates, hot markets, sellers' markets, bubbles... but what does it all mean to you as a buyer in Pittsburgh?
First, here's a quick market summary: we are expecting consumer interest rates to slip down a little further as go into August. As mortgage interest rates continue to drop, more buyers are getting motivated to enter the market. There's more demand than supply, which is making the real estate market more competitive. We're seeing more situations of multiple offers, escalation clauses, or buyers getting beat out several times before getting an offer accepted.
This means that you, as a buyer, have to bring your A-game as you start looking at houses! Move fast and be competitive.
We want our clients to have the best experience possible and land their dream home! Whether you're a first-time homebuyer or you've bought a home before, these tips will give you a competitive edge in a sellers' market.
Keep your credit score high.
Well before you start looking for houses, you should look at your credit score. Check your credit report and make sure there are no errors. If there are, start a dispute (this can take weeks, so start the process ASAP). Then, see if you can boost your credit score. The higher your score, the lower your rates, and the less money you'll pay on your mortgage. So address any past-due accounts, pay down balances, and don't do anything that would lower your score.
Figure out your down payment.
The rule of thumb might be a 20% down payment, but that's not realistic for many buyers. The minimum down-payment for a conventional mortgage is 5% (or 3.5% for FHA). Make sure this money is available and accessible - not in a CD or in the stock market - so you won't be slowed down when you're ready to make your offer.
Get pre-qualified (or pre-approved).
This is the biggest secret to moving fast and getting your offer accepted. As soon as you're serious about looking for a home, get pre-qualified. All that means is that you've spoken to a lender and answered basic questions about your employment, debt-to-income ratio, and credit score. The lender will tell you whether or not you qualify to borrow money from them, and how much they could approve you for.
The first reason this is so important is because it ensures you're househunting within your budget. You don't want to fall in love with something that ends up being out of your price range! Or, if you don't yet qualify, you'll know what you need to work on.
The second reason is that being pre-qualified makes you more appealing to the seller. Sellers in today's market get to call the shots. They're getting several offers, some of which may be above asking price. But even if someone makes a higher offer, it could fall through if they end up getting declined for financing. So the offers from buyers who are pre-qualified are much better for sellers!
By being pre-qualified, you have a higher probability of getting your offer accepted. So take the time to call you bank (or research lenders) and get pre-qualified. If you have any questions, your Harvest Real Estate agent would be happy to help!