Competition for homes is tough — how to stay a step ahead
Spring is almost upon us, and normally the homebuying season would be warming up with the weather. Instead, it is expected to remain red hot, as it has been for months since we emerged from the pandemic’s first wave last summer.
Interest rates remain low, and people continue to envision a work and home life balance that may be at least partially changed for the long term. This has resulted in a sustained real estate market with plenty of competition among buyers.
Here are a few ways you can stay a step ahead and secure your next (or first) home.
HAVE A FINANCIAL PLAN » While this may seem obvious, there is another layer to planning your finances in a competitive housing environment. It’s not enough to have all the financing for your new home in order. With mortgages taking up to 90 days to complete with current volumes, you need to be looked at as a longterm, attractive buyer that can show your finances are in prime condition throughout the homebuying process.
DON’T ASSUME CASH IS KING » If you have the financial wherewithal to pay cash for part or all of your home, beyond the required down payment, it is worth considering depending on your circumstances.
However, these are unique times in homebuying. With rates so low, and inflation low as well, you may be better off long-term by financing your home and pocketing your extra cash, or using it for renovations if you can’t find the perfect home, but you can still find one that is better suited to your long-term needs than where you are now.
And according to a recent WSFS Mortgage survey, you won’t have too many competitors planning to use 100% cash to be a more attractive buyer, as only 7% of people planning to purchase a home in the Greater Philadelphia and Delaware region planned to do so. Meanwhile, nearly nine in 10 (87%) are planning to get a mortgage to finance some or all of their home purchase.
GO WITH FAMILIARITY BUT ASK FOR CHOICES » The WSFS Mortgage survey found that 82% of repeat homebuyers would use the same realtor from their previous purchase. That’s great news and shows a level of trust that is important in crunched real estate markets.
More than three quarters of homebuyers also say their realtor plays an influential role in which lender they choose, but nearly half (47%) do want multiple options. Make sure your realtor not only has good relationships in the real estate market to help cultivate multiple home options through their network, but that they can also connect you with two or three lenders they trust.
When looking for your new home, keep these tips in mind but also remember to apply them to your own unique situation. From location preferences to financial considerations, there’s a lot to navigate. But having the right professionals in your corner goes a long way toward a successful purchase.
Jeffrey M. Ruben joined WSFS through its acquisition of Array Financial, a fullservice mortgage banking organization, and Arrow Land Transfer in August 2013. Jeff formed Array and Arrow in 2005, having previously held senior executive roles at financial and legal institutions.