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In a seller's market, avoid these first-time buyer pitfalls

In a seller's market, avoid these first-time buyer pitfalls

February 9th, 2018

The housing market is booming, and hit several records in 2017. The typical home on the market went under contract in just 37 days from the listing, setting a new record for home-selling speed, according real estate company Redfin.

More than a quarter of homes sold for more than their list price, which is the highest percentage ever recorded by Redfin.

And the median sale-to-list price hit 95.4 percent, meaning almost all homes sold for at least what the seller listed them for.

But first-time homebuyers out there shouldn’t get discouraged. Avoiding some big pitfalls will ensure you can compete in the market and find the perfect starter home for you and your family.

 

Assuming you can’t afford to buy

When the market is hot, many would-be first-time buyers think they can’t compete. But the truth is, you don’t necessarily need a perfect credit score or 20% cash to put down to buy a home.

With rental costs skyrocketing, there are mortgage programs out there to meet all different financial circumstances. How will you know if you qualify if don’t reach out to us and find out?

 

Skipping over getting pre-approved

Buying a home is an exciting time, so who wouldn’t want to dive right in and start scheduling tours and visiting open houses? The mortgage side may not be quite as glamorous, but it’s so important that buyers first get pre-approved.

Why?

Well, first of all, how will you know how much you can afford without a lender’s preapproval? Mortgage payments are a little bit more complicated than taking the listing price and dividing it, so it’s better to know your budget before you fall in love with a house you can’t afford.

Secondly, having that pre-approval is a big indicator to the seller that you’re serious about buying a house, and that you can afford it. Sellers want to make sure the offer they pick will actually go through, and a pre-approval shows you can put your money where your mouth is.

 

Making big changes before closing that change your credit score or pre-approval

A pre-approval only holds up as long as your credit score and income levels do. If either of those things change drastically before you close on the loan, it could hold up the process or change your budget entirely. If the seller is closing on a new house, any delay could derail the whole transaction.

After you get that pre-approval, make sure you pay all your bills online and avoid any big purchases or new credit accounts. Also avoid switching jobs if possible, since that will hold up the process.

 

Acadia Lending Group LLC

190 Riverside Street Unit 4B
Portland , Maine 04103

Phone: 207-899-4500

Fax: 207-899-4503

NMLS: 370636

 

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