Buyers got on a roller coaster in January 2022 and stayed strapped in for the real estate market loops throughout the year.
Mortgage rates were low, then soared to a 20-year high of 7.08% before dipping again. Median national list prices rose to a historic $450,000, and then they, too, began to fall. Homes in July were snatched up in 34 days—and come November, they lingered on the market for 56 days.
With so much going on, it’s little wonder that you might have missed some of the advice we gathered in the past year. And what does it all mean if you’re looking to buy a home in the new year?
Luckily there’s no need for you to wear out your search bar looking for our past articles on Realtor.com®. Instead, we sifted through the hundreds of articles in our recent archives to find the top insider tips and best strategies on homebuying for you.
Here’s seven of our most popular advice pieces of 2022, and a takeaway, must-know tip we want to pass on as you head into 2023. So, Happy New Year! (And happy home hunting.)
Buying a property is a thrilling prospect—a “dream home” will finally be yours!
Well, here’s the thing: While making an offer and closing on a property should make you downright exuberant, the process of getting there generally involves a few tough truths. First, you may have to give up on the concept of a dream home altogether as most houses out there come with slight—but fixable—imperfections.
Another reality check? Don’t assume a seller will fix every single needed repair found during an inspection. You may have to do some yourself before you move in.
Can’t-miss tip: Many homebuyers pass over the importance of getting pre-approved for a mortgage before starting a house hunt. Yet knowing how much house you can afford is a critical guidepost for every home search.
This fall, the seller’s market finally cooled and suddenly, buyers had more control. The result? The homebuying “rules” that governed the COVID-19 pandemic homebuying craze started to become more fluid. Of course, home shoppers still had to contend with high prices and soaring mortgage rates.
But those two factors also meant there were fewer buyers in the market. And less competition allowed for the risky and wallet-busting ways of the past two years to finally change. Gone are the days when putting in an offer immediately, automatically paying over the asking price, waiving contingencies, or not asking a seller for concessions was de rigueur. Today, more buyers are in the driver’s seat—and can start making their own rules.
Can’t-miss tip: For the past few years, many buyers felt the competition breathing down their necks and put in offers hours after seeing a home. Today, buyers can generally wait a little bit to make an offer in the hopes that the list price will come down. So if a property you like is still on the market a few weeks after listing, that’s your signal that you can make an offer at a lower price.
Another thing buyers had to contend with during the height of the COVID-19 pandemic? So much pressure to land a home that they resorted to buying a home sight unseen. This is when you simply see a property online and make an offer without ever visiting the actual home.
This risky strategy can work if buyers know exactly what they are looking for in terms of home, number of bedrooms, and location. Yet there are other times buying a home without laying eyes on it can be an utter disaster.
This is what happened to Mina Starsiak Hawk, house flipper extraordinaire from “Good Bones.” Starsiak Hawk—with all of her real estate knowledge—made a mistake when she bought a home sight unseen that turned out to be a dump with no foundation.
Can’t-miss tip: Don’t rush into making a home purchase. You could end up with a dud as Starsiak Hawk did.
Yeehaw! You found a home you really like and are ready to make an offer. This is fantastic news—if you are properly prepared. Coming up with a solid offer isn’t simply choosing a number and proposing it to the seller.
Instead, you need to consider several additional dollar and cents factors, including what a home’s property taxes are, how much home insurance will run you, and if there are any additional homeowner fees you’ll be on the hook for every month. Once you have a complete financial picture, you can put in an offer that protects you in the long run.
Can’t-miss tip: It’s a good idea to check on a home’s permit history with the local building department before making an offer. For instance, you might be enchanted by a property’s screened porch, which might have been put in illegally. (And that could result in a fine for you down the road.)
Competition among buyers is slowing down as we head into the new year. Yet a great property in a buzzy neighborhood that’s priced right could still elicit something most buyers fear outright: a bidding war.
Entering a bidding war is often uncharted territory for most home shoppers, so there are important safety rails to keep in mind. For instance, some buyers give up important contingencies, such as a home inspection, as a way to gain an edge in a bidding war. However, you really don’t want to skip this crucial step. Offer to shorten the length of your escrow as a bargaining chip instead.
Can’t-miss tip: Don’t get caught up bidding on a home without knowing how much the property is truly worth. Do research into comps to ensure the house is worth your highest bid.
If you’re having trouble finding an existing home you love, we have an important tidbit to share with you: Around one-third of all homes for sale are newly built. And for homebuyers struggling to find the perfect home in their price range, looking at new construction can be an easier way into the real estate market.
Why? New homes are, well, new. So you won’t have to immediately make repairs once you move in, which is often the case in older homes. And homes can be customized to suit your needs from an extra office nook to a larger kitchen island.
Can’t-miss tip: Buyers can shop around for competitive mortgages just as they would for pre-existing homes. But often builders offer money-saving incentives to home shoppers if they work with an in-house lender. What kind of incentives do you ask? Anything from buying down the mortgage rate to offering a rate lock for a longer period.
Have you always dreamed of waking up to the sound of lapping waves and ending your day with your toes in the sand watching the sunset? Sure, we all have. But many of us think that dream is financially out of reach. Enter David Bromstad from “My Lottery Dream Home,” who managed to track down gorgeous oceanfront property at attainable prices in South Beach, FL, which has homes in the $300,000 to $450,000 range.
Can’t-miss tip: You don’t need to spend every cent of your homebuying budget buying a property. Indeed, Bromstad points out it’s often a good idea to buy a home that will leave you with some money left over for repairs and improvements.
Source: Realtor.com
