- Today’s buyers are reporting a longer-than-expected home buying timeline due to low inventory and a crowded marketplace.
- By doing their research and being ready to bid quickly (and repeatedly), buyers can move toward the closing table in upcoming months.
- Buyers who get pre-approved can have a better understanding of their budget and their place in our local market.
You’ve likely heard that the housing market is hot, hot, hot — but many buyers are still unprepared for how competitive the landscape is. Even if you don’t plan to buy until April or May, we recommend that you start preparing today so that you don’t fall behind once the spring market arrives.
Prepare yourself for a three-month home search
A recent stat from the National Association of Home Builders says that the typical buyer is shopping for more than three months before finding the home that’s right for them.
While it may go against everything you hope for (and have seen on tv shows like House Hunters), keep in mind that you may need more than a few weekends of open houses and home showings to find the house you’ll eventually purchase.
Ease into the market by checking off early-stage buyer tasks, including:
- Hiring a REALTOR® to represent you in your home purchase
- Setting a smart budget by getting pre-approved for a home mortgage loan
- Researching and narrowing down neighborhoods or cities where you might like to live
- Setting up listing alerts in your desired area and within your identified budget
- Visiting open houses to get a better sense of market inventory and pricing
Be ready to bid
While it may take you some time to find the perfect home, homes in low- to mid-tier price points and in-demand locations are selling fast, fast, fast. Even in January, a historically slow month for home sales, we saw the market moving quickly:
- Twin Cities metro homes priced under $250,000 sold in just 37 median days1
- Metro homes priced between $250,000-$500,000 sold in just 46 median days1
That means buyers like you must be ready to move quickly and may need to bid aggressively. As you prepare to tour homes or begin checking out open houses, create a list of what you like and don’t like — and a list of “must-haves” vs. “nice-to-haves.” Once you find a house that meets all your criteria, you may want to make a fast offer — even if it’s a little sooner than the spring timing you’d planned.
If you don’t feel ready to make an offer, then work with your Realtor to determine what’s holding you back. No one should be rushed into a home purchase, but today’s market does require fast thinking and fast action. Together, your agent will help you set up a smart, strategic plan to view houses and follow a timeline that doesn’t feel too rushed.
Don’t expect a bargain
We’ll just cut to the chase here: In both December 2019 and January 2020, sellers in the 13-county Twin Cities metro area received an average of 98.8% of their original list price at closing2. In our low-inventory, high-demand market, sellers still hold the advantage. That means that in addition to homes selling quickly, most buyers are also bidding the full list price (or very close to it) when they make an offer.
If a home has been on the market for a long time, you may have a case for making a lower offer — but you shouldn’t go in expecting a bargain. Your REALTOR® will provide valuable insights on how much to bid and how to proceed if the seller makes a counteroffer.
Celebrate today’s low, low rates
As we predicted earlier this year, interest rates should remain low for all of 2020. This is great news for today’s buyers, because when rates are low, buying power goes up! Even a small hike in interest rates can end up costing a borrower thousands of dollars over the life of the loan.
By getting pre-approved early in the buying process, you’ll have a better understanding of the rate for which you qualify — and how that affects your buying budget and payments over time. Having a pre-approval letter can also help you get taken more seriously by sellers when you make an offer.
Ready for summer in your new house?
Whether you’re hoping to enjoy boat rides from your new lake home or iced tea on your deck overlooking the North Loop, you’ll want to be unpacked before the first few days of summer arrive.
That means you’ll have to get started on your buying journey now. Contact Edina Realty or your agent to get the conversation started.
- Based on information from the REGIONAL MULTIPLE LISTING SERVICE OF MINNESOTA, INC for the period January 1, 2020 through January 31, 2020.
- Based on information from the REGIONAL MULTIPLE LISTING SERVICE OF MINNESOTA, INC for the period December 1, 2019 through January 31, 2020.