When you finally find the home of your dreams it can be tempting to rush right into the purchase especially during competitive times like these. However, don’t skirt your opportunity to do a professional inspection of the home before you solidify the deal. This will help you know exactly what you are getting into and potentially further negotiate should any larger problems become uncovered. 

Foundation

A home cannot survive without a stable and intact foundation. A professional home inspector will determine whether the foundation is solid and secure both inside and outside. Signs of crumbling mortar, gaps or deteriorating blocks are red flags that the structure may start to lean or shift. If the ground slopes toward the foundation, that means water runoff could collect around your home and seep into the structure causing further issues.

Plumbing

An overview of the plumbing is also something that should be checked. Water lines should be inspected along with a check for water stains or wet spots on walls or ceilings which could be a sign of an issue. Signs for both plumbing issues as well as any water coming in from outside should be looked for so you know what you are dealing with.

HVAC

The HVAC system should be in proper working order and preferably not nearing the end of its life span. An inspection of the system will reveal whether it is fully operational or will need to be replaced within the next few years. You may request the current owner’s utility bills to see if the systems are energy efficient, and if not, you may want to consider installing new ones to save you money and a potential headache should it break soon.

Roof

The roof is another area to be examined carefully since repairs or replacements can be costly. Have the home inspector check for missing or damaged roofing elements as well as any problems with the gutters or downspouts. There should be permit info available so you can see how old the roof is and when to anticipate replacement.

Competition in the real estate marketplace is still steep this season. There are only so many homes on the market that many buyers are all competing for. According to a recent report from Realtor.com, many buyers have shared some common tactics that are making their offers stand out aside from a higher dollar figure. Here is a closer look:

Increase earnest deposit

If you have two offers that are offering similar money and terms but one is putting more earnest money down, chances are that they will be the more attractive offer in a seller’s eyes. The more money a buyer puts down, the more skin in the game so to speak they have. At a certain point of a sales transaction, buyers become more bound to the deal and cannot back out without penalty or loss of earnest money. This makes a buyer’s offer more solid to choose.

Offer a leaseback

Just like most buyers face the problem of finding a suitable home, sellers are experiencing the same once they lock in a buyer and begin looking. Buyers can help ease the transaction by offering a leaseback for perhaps 60-90 days at no charge to allow them some time to locate their next home. This can be ideal as it reduces the pressure for them to consider temporary housing should they not lock down their next home in time. 

Add in escalation clause

This is a crafty contract addendum that you can use when a bidding war is probable. It basically says it will increase the buyer’s amount by a certain amount over the highest bidder should there be another one. It can be tricky as it sends a message to a seller that they are willing to pay more yet if they are in a competitive bidding scenario then they won’t lose out if their first amount was lower than the maximum they would be willing to pay to secure the home. 

Inventory levels may still be on the low end, but buyers are still in search of some particular home features this season regardless. According to a recent release of information from Realtor.com, there have been some popular search terms that have been pretty common lately. The spring season along with some recent pandemic influence may be contributing to these trends that are as follows:

Water features

One of the most popular search terms this year continues to be a swimming pool, and not just in Florida. They have gained popularity since the pandemic carried right into this season. Aside from swimming pools we have seen hot tubs also becoming a highly searched feature. They can offer a great place to relax and unwind even during cooler temperatures and can also be somewhat therapeutic. 

Outdoor views

Oh the views! Buyers are looking for homes that offer some inspiring or peaceful views. Among the top most desirable types of views are river, waterfront, beach, water, lake or golf course. With homeowners spending more time at home they want to feel like they are on vacation all of the time. 

Outdoor activity and fitness

Buyers also have displayed an interest in properties that offer some sort of facilities for activities. Homes that offer community amenities such as golfing, tennis, boating, gyms and similar have gained search popularity. They are interested in living somewhere where they can enjoy things to do in between their live/work schedule. 

Spaciousness

Buyers want even more space nowadays. Some popular searches revolving around roominess included cathedral ceilings, large lots, outbuildings and even a library. The high ceilings make spaces feel larger and open as buyers are excited by homes that are appearing more accommodating. Libraries or outbuildings can also offer many more options for activity rooms or home offices. 

Buying your first home is very exciting as you search for your dream home. During your first go around you may be thinking more about what you think is ideal for space, layout, location and the like but there is more to pay attention to than these basic wants. It can be extra difficult to consider some of the other important things especially during a competitive market like this, but here is some advice on things to check out before you submit your offer. 

HVAC and Plumbing

These systems can be expensive to repair or replace so make sure you do a thorough inspection. Check to see if there have been any updates or repairs as well as any signs of neglect like a filthy air filter at the very least. Many sellers will offer paperwork on recently replaced systems too so ask if that is available.

Structural Issues

Check for any obvious signs of a potential structural issue. These can be things like cracks in the floor or walls or perhaps a screen room with a leaning wall. Structural issues can be very expensive to repair and any sign of one should be fully examined by a professional home inspector.

Crooked fixtures

Crooked or off-center fixtures not only don’t look right but can suggest an issue behind the wall. Was it sloppy electrical work or just a sloppy install of the fixture. If there are many of these issues you may want to slow down and ask some questions.

Storage space

Especially as first-time buyers tend to establish some roots with a growing family, consider storage space options. There may be some room now but what about in a year or two? Take a look at how many closets you have now and compare that to the homes you tour. You certainly don’t want to go backwards in closet space.

Noise levels

Most home tours happen during the day, during the week. However, if you really want to know what an area is like then be sure to visit it in the evenings and on weekends. This will give you a chance to see more neighbors when they are home and if you can hear them well or not.

The real estate market is certainly robust and in favor of sellers. With the low housing inventory and record-high prices most have the opportunity to make big profits quickly. Homes typically sold in about one week with receiving full asking price, according to the National Association of Realtors’ 2021 Profile of Home Buyers and Sellers. On top of this bidding wars had also pushed up home prices even further.

On the flip side there are numerous buyers who are having to deal with a very competitive and sometimes frustrating housing market. The same study from the NAR stated that 35% of homebuyers purchased their home for above the asking price. While it may seem like an uphill battle these days to buy a home there are some ways to be best prepared and remain positive through the process. Here are a few ideas that you can try on your end.

Get pre-approved

Especially these days don’t even bother looking online for a home and getting excited if you haven’t gotten pre-approved yet. This is a basic essential that needs to be done in a normal market let alone a highly competitive one. This letter proves to a seller that you have a commitment from a financial institution to finance your purchase. 

Put out an APB that you are looking for a house

Simply put – tell everyone you know you are looking. You never know who in your network may help you find a home. Also, if you find that you may have some sort of personal relationship with a seller then it may increase your chances of getting your offer accepted. 

Be flexible on a rent-back situation

There are some ways you can be flexible or accommodating to a seller beyond the price paid or waiving important things like a home inspection. Consider catering to the seller’s needs in the way of an ideal closing date. This may mean either waiting longer for the closing or entering a rent-back situation temporarily. 

Consider some sweat equity

Finally, most people want to find a home that is turnkey where all you have to do is move your things in. However, where market conditions are as competitive as they are, you may want to open up your search and consider a home that has good bones but may need a little TLC. This may help you not only get a home but could also help you get it at a price that is more within your comfortable budget. Any improvements can be done over time as you choose.

Nowadays you can’t discuss residential real estate without commenting on the affordability challenges that buyers are up against today. There’s no question that homes are pricier today than they were over the last two years, but that doesn’t mean homes are now truly unaffordable. There are three measures used to establish home affordability which include home prices, mortgage rates, and wages and here is a closer look at each of them.

Home Prices

The most recent Home Price Insights report issued by CoreLogic indicates that home values have risen by 19.1% from last January of 2021 to January this year. That was one reason affordability had diminished over the past year.

Home Loan Rates

While the current global uncertainty makes it tough to project home loan rates, we do know current rates are almost one full percentage point higher than they were at this time last year. Per Freddie Mac, the average monthly rate for last February was 2.81% where this February it was 3.76%. That increase in the mortgage rates also makes homes less affordable than they were last year.

Wages

The one large yet positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

“Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income.”

The National Association of Realtors (NAR) also recently shared some data that examines income and affordability. The NAR report gives a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. 

While the figures may vary in certain locations within each region, it’s important to note that it was found that in the majority of the country, homes are still affordable.

Ultimately when you think about affordability you must remember that the picture includes more than just home prices and mortgage rates. While they do have a significant influence, wages need to be factored in as well. Because wages have been rising, they’re a significant reason that, while less affordable to say two years ago, homes are not unaffordable today.