- It’s a tough, competitive market for buyers, and some may be feeling that they’ll never find and win their dream home.
- By strategizing with an agent and re-assessing everything from budget to timeline to location, buyers can better understand what they are willing to compromise on — and what is truly a “must-have.”
- Once the new plan is in place, buyers may find that their dream home has been waiting for them all along.
Buyers today are feeling the squeeze. As home prices and interest rates rise, inventory continues to remain low. Even the most hopeful home seekers may be feeling pessimistic, and wondering if the right home will ever be theirs to keep.
Here are our best insights for navigating today’s market as a buyer. Whether you’re just dipping your toes in or have lost in multiple offers a few times, these tips should help you determine the right path forward.
Have the hard conversation with your agent
First, it’s time to take a peek at the offers you’ve placed and how you’ve stacked up against the other bids and winning buyer. Your agent may have exact details for some properties, or a range of varying details, but it’s all helpful. Together, ask:
- Have we ever been close to winning an offer? Or are we being heavily outbid every time?
- How many offers are typically being placed on the properties we like best?
- If your agent doesn’t have a lot of information, try looking to see if any of the homes you bid on (or even liked) have closed. How much did they end up going for, compared to our offer or budget? Were we close or quite far off?
While it may not be a fun conversation, it will likely be a productive one that helps you reorient your strategy. If you’re in the running for the houses you like best, then it may just be a matter of being patient. If you tend to be in the bottom half every time, you may want to adjust your expectations or look to other neighborhoods or cities for houses that better fit your budget.
Think through your timeline
Today’s sellers have a keen advantage in the market… until they sell and have to re-enter the market as a buyer! If you have flexibility in your timeline, then you may want to add that into your offer. Whether you end up closing in 90 days to allow the seller more time to find their new home, or renting it back to them before you move in, offering more time to the seller can help your offer stand out — even if your monetary bid comes up a bit short.
Reassess your “must-haves
“It’s pretty common for buyers to have a long list of non-negotiables… until they find a house that just feels right,” said Edina Realty president Sharry Schmid. “Then, suddenly, having laundry in the basement isn’t such a big deal.”
Of course, it’s fine to have standards. But if you have been ultra-picky about the homes you’ll consider, and you’re losing bid after bid, you may want to take stock in the amenities or features you really need… and let some of the others go.
Try touring a few homes that wouldn’t have passed your original requirements. Discuss the pros and cons of buying a home with only two garage stalls instead of three, or a split-level design, or one that doesn’t have an owner’s suite with an attached bathroom. If you decide to hold strong to your original must-haves, that’s just fine. On the other hand, you may encounter a home that has 90% of your desires, and you might just decide it’s worth it after all.
Reconsider your down payment, if possible
We recognize that you’ve likely been saving for years for a down payment, so it’s unlikely that you have an extra bank account you haven’t tapped into yet. However, if you’re lucky enough to have family or friends who are willing to provide mortgage gift funds, it may be time to ask for a financial favor. Here are the details on how to legally obtain mortgage gift funds from a personal contact.
Alternatively, you can talk with your REALTOR® or home mortgage consultant to determine if you are eligible for down payment assistance. In Minnesota, funding assistance up to $17,000 may be available; in Wisconsin, the maximum assistance amount is 6% of the home’s purchase price.
Consider other home types
While many buyers are looking for single-family homes with a yard and garage, other housing options are available and can offer just as many advantages. Condos and townhomes tend to have lower price points, while requiring less maintenance.
Plus, multi-family housing is a lot different than it used to be. Condos are no longer available in only the swankiest parts of downtown Minneapolis and St. Paul; they can also be found in most suburbs and neighborhoods. Townhomes are not only being built in large developments, but also in smaller communities near parks, walkable retail and more.
Need help entering the market as a buyer?
It’s a tricky time to buy, but having the right professional on your side can make all the difference. Reach out to Edina Realty or your agent today to get started.