First-time homebuyers have their work cut out for them in the current real estate market. From metropolitan areas to smaller cities, prices are higher than ever. Despite this unprecedented appreciation, homes are still selling at record paces with many listings flying off the market in mere days.
This can be discouraging for people looking to buy their first homes. However, there IS hope if you adopt a strategic approach. Read on for a roundup of expert tips aimed at helping you turn your homeownership dreams into a reality in today’s competitive real estate market.
Be Ready to Act Fast
High demand, low interest rates, and limited inventory mean homes in Cleveland and Athens may move fast. As is being seen all over the country, the area remains a seller’s market. Not only are home prices higher than ever before, but they’re also selling faster. The takeaway for prospective homebuyers? You have to be prepared to act fast.
This means taking a proactive approach. Before you even start your search, line up an agent, organize your finances, evaluate your lending options, and get preapproved for a loan. And make sure to ask your realtor about programs for first-time buyers, which can include down payment assistance, tax deductions, home buyer education, and other benefits.
Your agent should also make you aware of everything you need to know about the specifics of purchase agreements in the state of Tennessee so you’ll be ready to move with speed and confidence when you find a desirable property.
Save for a Larger Down Payment
While you can technically buy a home with less than 20% down, a larger down payment gives you a much stronger position. In fact, 30% is considered the new 20% when it comes to down payment. Have more cash? Even better.
Can’t wait to save up for that down payment? At Bowater Credit Union, you don’t have to! We offer home loans with as little as 3% down – loaning up to 97% on fixed-rate mortgages and 95% on adjustable-rate mortgages.
Rethink Your Top Price Point
Homes in the Cleveland area are consistently selling for more than the asking price.
For example, in February of 2022, 53.6% of homes in Bradley County, Tennessee sold above asking price. Factor in bidding wars that are further driving up purchase prices, and it’s wise to reevaluate your price point. This will help you create a cushion between the list price and what you’re able to pay and allow you to stay competitive in a bidding war.
A safe bet? Capping your search at a minimum of 10% below your budget.
Many prospective homeowners are also utilizing escalation clauses, which lowering your top price point will also allow you to do. An escalation clause lets home buyers build a condition into their offer that says, “I will pay x price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer to y price.”
Commit to Compromise
Buying in a seller’s market also means that you should be prepared to negotiate and compromise on everything from waived inspections to free rent-backs. Deciding what you’re willing to tolerate ahead of time will help you respond quickly to tight counteroffers.
A good realtor will help you identify potential compromises and deal-breakers to navigate the situation in the most acceptable and advantageous way.
Compromising may also mean expanding your search area.
Keep Your Chin Up
Discouragement goes with the territory of being an excited first-time buyer in a red-hot seller’s market in which home prices are up nearly 20%. Manage your expectations by reminding yourself that homeownership is a long-term business decision. If you let your heart take over, you may end up overpaying or settling for a home that doesn’t meet your wants and needs.
On the flip side, if you’ve put in multiple offers on multiple homes and continue to be passed over, it may be time to reevaluate your risk tolerance. If you’re not prepared to make adjustments, this may not be the right time for you to buy.
The real estate market is cyclical. Opting to rent may find you returning to a completely different market in a much stronger position in a year or so.
Make Your Move to Tennessee with a Loan from Bowater Credit Union
From Cleveland’s quaint downtown and stunning Ocoee Region scenery to the southern charm, small-town hospitality, and plum location of Athens, there’s a reason why both the Cleveland real estate market and Athens real estate market are booming. If you’re looking to call one of these towns home, Bowater Credit Union can help.
With Bowater Credit Union, you’ll benefit from low rates, flexible terms, and personalized service from a local lender. To take a giant step in the direction of the home of your dreams, we invite you to learn more about our mortgage loans for first-time homebuyers.