By Skylar WelchThe current real estate market is literally on fire. With interest rates at historic lows and an influx of people from out of state moving to Maine to escape cities like Boston and New York during the pandemic, finding a home is like trying to score a roll of toilet paper during quarantine. The shelves were empty. The fact is, there are too many homebuyers, and not enough properties for sale, and the “shelves” can’t get stocked fast enough.
The current inventory is at an all-time low, coupled with interest rates at an all-time low. This has caused the total housing supply to be lower than ever and the time a house sits on the market to cut in half from just a year ago.
People are willing to purchase properties site-unseen and make offers far above the asking price. So, what little inventory is out there, is going extremely fast, much like those few rolls of toilet paper that were disappearing quickly. Even the off-name, single-ply brands were flying off the shelves. This is similar to the real estate market, with houses that you may have never thought would sell, are selling for far more than expected!
So, how do you prepare to purchase a property in this market? It’s extremely important to be prepared and ready, so if a property pops on the market that you are interested in, you can move quickly.
If you are thinking about purchasing a home, it’s important to
meet with a mortgage professional to make sure you have all of your ducks in a
row. When you meet with real estate agents, they are going to ask, “Have you
been prequalified?” If you haven’t, they are going to tell you that you need to
be prequalified before you can start the home search.
Due to the pandemic, most listings are requiring a prequalification letter before even letting you view a property. During the prequalification process, your mortgage professional will be able to help you figure out the perfect loan program for you, what you are qualified up to, and most importantly, help you find a purchase price that gives you a comfortable monthly payment, so that you can confidently go back to your real estate agent and let them know the price range you are ready to shop in!
Here are a few quick tips to be best prepared:
** Have your finances in order regarding where your funds to close will be coming from, whether you are using your savings, receiving a gift from family, or pulling from a retirement account.
** Make sure your credit is in the best possible place. A quick tip about credit, it is important to have two to three open revolving lines of credit (credit/store cards), but make sure that these balances are under 30 percent of the credit limit, before having your credit pulled.
** Gather your financial documents such as tax returns and W-2s, so ensure you are ready to move quickly, when the perfect property pops up.
** Do your research, and find the perfect real estate agent to meet your needs and that is willing to compete for you, to win a property.
Working with a local mortgage broker can help you win in a bidding war! What it comes down to, is that in a competitive market, local relationships are extremely important!
Agents are aware of local mortgage professionals and when they see an offer come through with a name that they recognize, that has a great reputation for being reliable, responsive and fast they are more likely to accept the offer, than if the prequal comes from a national lender, that they know may not prioritize your application, be available when needed, or understand the local market.
There is no sign of the market slowing down, and with rent prices rising and interest rates remaining low, it is still a great time to buy. Stop paying someone else’s mortgage and start building your own equity! Have patience and take the steps to make your strongest offer possible! Make YOUR dream of homeownership a reality in 2021. <
Skylar Welch owns Maine Pointe Lending is at 202 US Route 1, Suite 102 in Falmouth. Call 207-949-3568 or find them online at www.mainepointelending.com. They’re also on Facebook at https://www.facebook.com/skyeclosesmaine/