Currently, all real estate price points are experiencing a shortage of inventory in the housing market. At this point in time, the entry level for first-time home buyers is experiencing the greatest difficulty. This is due in part; many homeowners are staying in their current home longer instead of trading up due to rising construction cost. In addition, number of builders have abandoned the entry-level market. Unfortunately, most buyers need to brace themselves for higher housing prices than they may have expected in many parts of the country. Home buyers may be able to bypass some of these hurdles with careful strategic planning. Following are some points that may help you in this endeavor:
Rethink Home Expectations – Home buyers, as well as home builders need to determine what is acceptable for both. The goal is to have sufficient inventory and not to price buyers out of the market. One way to achieve more affordable housing is location. Look away from the city center, consider different type of home, such as, condo, townhome, fixer-upper instead of move-in-ready home.
Agents Finding Inventory – Real estate agents can help entry-level buyers by prospecting with sellers to determine if they would like to sell their home. If first-time buyer is willing to purchase a fixer-upper, they need to secure financing before closing the deal. By doing this the buyer will know their total monthly mortgage payment.
Creative Finance Solutions – First thing, get your buyer pre-approved for a mortgage loan. Many times, these first-time home buyers would like to buy more house, but are not able too since they are not aware of financing options that may be available. This is where the realtor and mortgage lender can do some research, looking for government assistance programs and bonds that would make the buyers desire more desirable and feasible.
Deal Sealing – In a market where the inventory is low, this usually affects first-time home buyers the most. In this situation, try to avoid multiple offer environment by adjusting the terms of the contract to benefit the seller. Examples might be: waving some closing cost, quick closing, and assuring the seller you not request any repair allowances. Finally, in this type of market it is important to do creative thinking and make those options avaiable in your offer.