The number of apartments and houses on the market has been falling over the past few months as sellers sit on the sidelines and watch what will happen with interest rates. Their passive strategy puts pressure on buyers, who are experiencing fewer homes on the market and greater competition to make the winning offer. Purchasing a property is a high-stakes decision, so don't cut corners that could result in an expensive mistake.
Helpful agent
The real estate market is undergoing an unusual transition. For buyers, it's essential to have an agent who will guide you through the current environment.
Timing the market
Waiting for the local real estate market to hit the bottom of the cycle is a waste of time. By the time you notice, the market will be on the way up again. Keep moving forward with your plans, and don't fret over events you can't control. In the end, real estate is an excellent long-term investment.
Mortgage fixation
Buyers often forget to include the expense of buying and selling a home in their calculations. So, don't fall into the trap of thinking it's only your mortgage rate that you have to consider when assessing affordability. Taxes and legal expenses also hit your bottom line.
Credit score
One of your first acts should be to check your credit score. Why? Because if you have a bad score, you'll pay higher interest rates. Ensure the mortgage you want will not exceed 28-30% of your gross income. Your total debt payments (including for cars and credit cards) should be no more than 36%.
Rushing a decision
With a shortage of properties for sale, rushing a decision is tempting. But that's a huge mistake and may end in buyer's remorse. You'll regret the most significant financial decision of your life.
Falling in love
Don't lust after a home you can't afford. You may be tempted to negotiate hard and find every quarter that's dropped down the back of the couch, but it's better to stay within your budget. It'll only take another hike in mortgage costs to send you over the edge.
Lender's approval
A pre-approved mortgage from a lender will help you set your budget. If rates go up, though, that promise is toast unless you've paid a fee to lock it in. Also, be aware most pre-approvals last 12 weeks, so you may need to apply a couple of times before you find the right property.
