In 2021, particularly in Western New York, the real estate market is hot. Prices are going up, houses are moving off the market fast, and some prospective home buyers are scratching their heads wondering what happened. Well, have no fear because we have compiled a series of eight tips for Western New Yorkers to consider before buying a home.
- Make sure you’re serious
This is the first tip for an obvious reason. Aside from sending a child to college, buying a home will be the most important and consequential financial decision of your life. This is not the time to be trifling. Second, the median number of days a house spends on the market in Erie County has fallen to just 10 days. That number is even lower in the suburbs of Clarence and Williamsville. There is no guarantee that you will see a house, in person or online, and it will still be there in a month. You need to be serious about buying a home in the crazy 2021 market if you are going to heed the following tips.
2. Hire an Agent
This seems like low hanging fruit. Doesn’t everyone get a real estate agent when buying a home? Well, no. It seems that there is a not insignificant number of buyers and sellers choosing to forgo an agent. While hiring an agent may not be mandatory, they can help buyers negotiate a bit better. Prices on the house could also be unreasonably inflated, and an agent would be able to see that more clearly than an average home buyer. Real estate brokers also help buyers draw up a contract of sale, perform a title search and can close the deal more easily. So, get an experienced agent who can help put together an offer and can coach you through any bidding wars.
3. Get a preapproval
In the 2021 market, a preapproval is one of the most important tools in a buyer’s arsenal. This will allow you to have some leverage in a bidding war. A preapproval letter from a mortgage lender is an offer to loan a buyer a certain amount of money, good for sixty days. You can use that lending amount in negotiations. If you’re pre-approved for a larger amount than another buyer, you can offer more for a house. So, get a preapproval before you make any offers.
4. Be prepared to cut from your list
Anyone who has taken in a few house showings this summer can tell you that housing prices have soared, and not because the houses have gotten any better since last year. You should have a list of things you absolutely must have in a home, but be prepared to surrender things on your list that you would like. Many houses in Western New York will need to have interior work done in order to retrofit them to modern tastes. If you see a home on a quiet street with a nice yard but it has a kitchen from the 1970s, don’t be afraid to pull the trigger. Interior work can always be done down the line.
5. Consider the neighborhood
In the middle of house hunting and making offers, one thing that can get lost in the frenzy is the neighborhood, the homeowner’s association, and the school districts. If you intend on putting down roots where you buy a house, you must consider the school districts. Some urban and suburban schools in Western New York are better than others, and suburbs with more expensive houses aren’t necessarily better school districts. Be sure to check out the local school rankings in Buffalo Business First and the Buffalo News.
6. Save for a down payment, among other things
Saving for a down payment is a crucial part of homebuying and something you should be doing for a few years before you decide to buy a house. You should aim to put more than twenty percent of the home price in a down payment or else you could face fees and enhanced interest rates from mortgage lenders. In addition to the down payment on the house, consider the closing costs paid to your broker and agents, real estate transfer taxes, appraisal fees and title fees as they could become quite substantial. Each amount may be small, but make sure to have money set aside for them when it comes time to sign on the dotted line.
7. If you like something, pull the trigger- FAST!
This is a seller’s market. Anyone can tell you that. Remember, however, that a seller is likely entertaining offers from several interested parties, many of whom are likely going to waive any contingencies in order to make their offers more attractive. You will likely not have the time to get the property independently appraised or inspected before the house is sold. If that scares you, good. It should. You should not, however, waive a title search contingency or an inspection contingency if you can. They could save you down the line.
8. Don’t panic if you’re caught in a bidding war
As I said before, this is a seller’s market. There will likely be more than a handful of interested buyers for each house. A few offers will be placed on the same house, that’s okay. The worst thing you could do in that situation is jump the gun and try to top everyone’s offer. Consult with your real estate agent, come up with a plan, then allow your agent to approach the seller’s agent. If the seller says the offer is too low, consult with your agent again. Don’t panic and end up paying through the nose for the house.