The market is robust right now, with prices continuing to tick up (see Market Update below), and interest rates even dropping a little. I had buyer clients lock in a 3.85% rate recently (CLS Financial), which certainly keeps payments affordable – relatively speaking.
The challenge for buyers is coming up with the down payment and closing costs. Look into various loan types to see what works for you: VA loans can be 100% financed, FHA loans can be 3.5% down, and some conventional loans require only 5% down, although the last two require mortgage insurance.
There are many buyers for homes in the $500,000-$700,000 range, and, without enough homes in that range, the competition is fierce. Make sure your agent is well versed in the area, communicates with the listing agent, and has creative strategies to make your offer stand out.
Sellers in that price range, when pricing their houses at, or a little below, market, are finding themselves with multiple offers, and homes can go into escrow within a week or two of going on the market. Even with all that activity, homes priced a little too high – or a lot too high – are sitting longer, facing price reductions if no offers come in over the first few weeks. Sellers can also run the danger of their home not appraising if priced too high, so be sure your agent explains all the pros and cons of offers that come in, and you don’t just take the highest offer. You want the most qualified buyer, and the one that will close escrow. By the way, higher priced homes tend to have fewer buyers, and stay on the market a little longer, so don’t worry if you’re in that range and it takes a few weeks.
When the market is moving this quickly, who wins? The answer is both when a home is competitively priced. The seller gets a good price for their home, and the buyers start building equity right away as the home values continue to increase. It’s a good time to buy, and it’s a great time to sell.