Competing in the 2021 housing market?

Competing in the 2021 housing market? That is the struggle lots of buyers are facing. We’ve all heard the news: the real estate market in Hampton Roads, as in everywhere else, is crazy.  The inventory of homes for sale is too low to match demand and costs are up significantly.

We’re hearing crazy stories about bidding wars, where houses go for tens of thousands of dollars above asking or where buyers make all cash offers without contingencies; a market like this hasn’t been seen since the mid 2000s.

If you’re wondering whether competing in the 2021 housing market is the right time for you to buy your next family home, you’re not alone.  For a lot of people though it’s not really a question because when the circumstances of your life dictate that it’s time to buy a house well, you buy a house.  Or, at least you try.  

Buyers today are facing biddings wars and have to bring more to the table than ever before – so it’s especially challenging.

More than ever before, my potential buyers have come to me with specific questions.  Should they make a cash offer on a home?  Should they remove all contingencies?  Is it worth it to buy a house that’s a total fixer upper – considering all the supply chain issues that contractors and others are facing?  What about closing costs?  Can we waive an inspection?  (The answer to the last one at least is both easy and clear: no, absolutely, positively NOT advisable under ANY circumstances.)

A licensed REALTOR ® with experience in Hampton Roads can be your best ally in such a difficult market.

In many ways, REALTORS® are adapting to this new normal along with our sellers and buyers.  This is where having a REALTOR who is actively engaged in buying and selling houses in your market is necessary.   

When leveraging assets to make the biggest purchase of your life in a tough economy, you need someone with experience. Because you’re making decisions – big decisions – about how to use your assets that will both give you a home and ideally  build your portfolio.  

Not only that, but you don’t have unlimited time and energy to keep making offers that  aren’t accepted.  If you’ve found your dream house you don’t want to make mistakes that come from being unfamiliar with Hampton Roads. Look for a REALTOR® with experience to get the job done for you.

What kind of offer will make me competitive if I want to buy a house in Hampton Roads?

If you’re trying to determine exactly what it takes to compete in the 2021 housing market, work with someone with extensive recent experience.  

Each neighborhood, each city or county, is slightly different except in the sense that they all require a practiced hand.  From historic Hilton Village in Newport News to Phoebus in downtown Hampton and Kingsmill on the James in Williamsburg and more, an experienced REALTOR® is the ally you’ll need.

There are lots of strategic ways to get an offer accepted without having to put in an all cash offer. An experienced REALTOR® understands nuances in the contract and in negotiations that can appeal to a seller. From timelines to closing costs, outstanding contingencies and more, a REALTOR® can help you craft an offer worthy of consideration.

In general, we’re seeing houses last less than a week on the market and offers are often above asking.  There’s not a lot of time to sit and think about it when competing in the 2021 housing market.  Mortgage rates are good, but prices are high – on average, they’re up about 14% from where they were last year.

Do you need to make a cash offer when competing in the 2021 housing market?

There’s no question that a cash offer on a home gets people’s attention.  It means you don’t have to qualify for financing and you don’t have a lot of pesky underwriters analyzing your financials.

If you’ve got a stockpile of money around, that’s great!  However, if you’re considering putting every penny you’ve saved down to avoid a mortgage that’s a lot to consider.  There are a lot of costs that can come up when you buy a new house.  

This is a big question and probably one that you and I can’t answer on our own.  In a best case scenario, I’d definitely suggest that you also talk to a financial planner.  If you’re going to make an all-cash offer it should be part of a larger financial plan that also considers ling term goals  By putting all that cash into the house you’re saving on mortgage interest – but you may also be missing out on that money working for you in the market.  What investment will pay the greatest dividends?

These are great questions and definitely an important part of an overall strategy.  You’re right to think of your home as an investment, but any investment requires a lot of cost/benefit analysis for a decision this big.

I like your thinking.  I like that you’re being strategic.  Together (with a great financial planner), I think we can figure out a way to balance your desire to own the home of your dreams AND make sure that your overall financial plan is a sound responsible one.

I don’t think that an all-cash offer is necessarily the only way to be successful, even in this crazy market!

There’s no question that an all cash offer gets attention.  In a perfect scenario a 20% down payment is ideal to avoid paying PMI monthly. But it’s important to weigh your options and the advantages and disadvantages of any course of action.  Don’t let yourself get so caught up in winning that you don’t take the time to consider the impact.

By working with an experienced REALTOR® in your Hampton Roads house hunt, you will definitely increase your chances of success.

For more information or to set up a time to talk give me a call at 240-381-5596.