Spring House-Hunting Tip #1: Close That Laptop—and Canvass Old-Fashioned Open Houses
These days, using real estate sites to explore your options is par for the course: 90% of people search for listings online during their home-buying process.
Kicking off your search online is a good move, but don’t dawdle too long behind the computer screen—inventory is expected to be tight in many major markets, so you literally want to hit the ground running.
“In our market we hope for a burst of new inventory in the spring, but that doesn’t always happen,” says Richard Seaton, vice president at TTR Sotheby’s International Realty in the Washington, D.C., area. “Even if that burst comes, demand will outstrip supply, so buyers have to be in a position to make a decision quickly.”
Plus, what you view online may not necessarily reflect what you see when you pull up to the curb. “Buyers should be careful,” Seaton warns. “The Internet can tell only part of the story—and it’s usually the part the seller wants you to hear.”
That’s why Yocum recommends using your favorite real estate site as more of an alert than a decision-making tool by setting up instant updates for homes in desired neighborhoods so you can be notified of new inventory quickly—and act quickly.
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“You need to be able to see the new homes the day they list, so you can be the first to see the home and make a quick decision,” he says. “First offers usually are successful offers.”
One other factor to consider? If you live a warm state, you may want to kick things off early. According to data from Trulia, the hunt in sunnier locales is already heating up. Home searches in Cape Coral–Fort Myers, Fla., for instance, were up 22% over the national average in January and February, while Tucson, Ariz., was up 11%.
There could be microtrends in your region that could impact local prices—maybe new homes run at a premium to older ones, or the demand for townhomes and condos outpaces single family homes.
Spring House-Hunting Tip #2: Educate Yourself on Market Values and Trends
“Buyers need to get up to speed quickly on market values so they know the right decision when it presents itself,” Yocum says. “The more quickly buyers can educate themselves, the more successful the home search will be.”
This, of course, is where it’s really all about location, location, location. According to the Case-Shiller 2014 home price index, San Francisco saw the largest annual regional gain at 9.3%, while other major markets—like New York, Chicago and Washington, D.C.—saw less than 2%.
“We’re in full-blown rocket booster mode and it’s great to be a seller,” says Alexander Clark, a realtor with Paragon Real Estate Group who runs TheFrontSteps.com, a San Francisco real estate blog. “Prices are through the roof—and going higher with each property sold.”
Of course, one of the best sources of insider information is a well-connected real estate agent. But Seaton also suggests checking out sites like Curbed.com for trends in your desired area and to find where new inventory may soon be popping up.
Be aware, too, that there could be microtrends in your region that could impact local prices. For example, maybe new homes run at a premium to older ones, or the demand for townhomes and condos outpaces single family homes in your market.
Spring House-Hunting Tip #3: Nab Low Mortgage Rates—Now
Another reason not to dawdle too long? You want to take advantage of low interest rates while they last.
“Mortgage rates are still historically low, allowing buyers to wrap up the most house their money will afford them at payment levels that should be affordable for decades,” Yocum says.
In fact, interest rates are so low that, in many markets, monthly mortgage payments are less than rent, adds Seaton. “Most predictions are that the fabulously low interest rates will stay that way through the spring, and that the variety of loan packages available to buyers will continue to multiply,” he adds.
House hunters also got another boost recently: In January the Federal Housing Authority, which backs loans for borrowers who make low down payments, lowered the annual insurance premium it requires from 1.35% of a home loan to just 0.85%. The Housing Department estimates this will save more than 2 million FHA homeowners about $900 a year.
Bottom line: It’s a prime time to jump on a home loan. After all, mortgage rates can be unpredictable—and a decision by the Fed to raise interest rates mid-year, as many economists predict, could cause them to climb.
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