About this time last year, I wrote a blog post entitled What to Do When Housing Isn’t Affordable. In the post, I outlined five different things someone who can’t afford to buy right now could do to make sure they put themselves in the best position possible to buy a home.
The last year has brought with it more drama and anxiety, but fundamentally we are still in a housing market in Northern Nevada where the median household income can’t afford the median sales price. I won’t go into the specific reasons here (think: supply and demand) because the average home buyer has no control over WHY the market behaves like it does. What I do think is appropriate though, is to add to my original post and provide some more lessons the last year has taught us.
1. Slow and Steady
Maybe you saw the recent Wall Street Journal article featured in Apple News about home buyers rushing to snatch up homes during COVID and regretting it, but if you haven’t, I’ve linked here so that you can peruse. The moral of the story is this: In order to compete for a house, some buyers didn’t conduct their due diligence, rushed in to beat the competition, and are now regretting it. It seems very obvious, but don’t underestimate how competitive you can be when you feel like you have no place to live or there won’t be any more houses to buy if you don’t get this one. In hiring, the expression is “Hire slow, fire fast.” That directly applies to Real Estate. When you buy, buy slowly. Take your time, trust your agent, do your homework, and be sure. Most importantly, don’t let market pressure dictate your speed. There could be 130 homes on the market (ten times what is active in Carson City right now) but if none of them are right for you or have big potential problems, then there might as well be none.
2. Meet with your Lender (Again)
COVID has changed a lot about borrowing money to buy a home, but it hasn’t changed how important it is to know your lender, know your ACTUAL interest rate, know your full purchasing power, and most importantly know what that loan looks like through it’s lifetime. Unless you are buying with cash, you have to borrow money, and you need to know, inside and out, what the terms on that money are and what you can afford as a payment. Additionally, you will need to know what new requirements you will need to meet because of the new standards of lending as it pertains to COVID.
3. To Thine Own Self Be True
If you’ve gone to see property with your Realtor® lately, then you might have seen a long line of other buyers and their agents waiting to get in to see the same house. The fact of the matter is that most homes, if competitively priced (and sometimes not) are receiving multiple, over-asking price offers within about 5 days of coming on the market. But realistically, the only way to be truly happy with your purchase is to be true to yourself. You can’t do that if you are constantly worried about what someone else is doing, what they are going to offer, or how you can “win.” Americans are learning that if you are the accepted offer on a house with problems and paying too much for it, you didn’t win anything. I am telling all my buyers right now to focus on themselves: what THEY need, what THEY can afford, and to offer what THEY believe is fair for the home and let the chips fall where they may. Easier said than done, I know, but in order to be ultimately happy, you have to be true and realistic with yourself.
4. Don’t Waive Your Appraisal
This is happening a lot with loan customers. Buyers are waiving their appraisal in order to get their offer accepted. The appraisal is a third-party evaluation of the property to determine if it is worth what the buyer has offered. The appraiser essentially tells the lender whether or not they should loan on a property and how much they should loan. As a home buyer utilizing a loan, the appraisal can act as a safety net to make sure you aren’t overpaying for a property. Waiving it essentially says, “We don’t care what it’s worth today, we will pay anything for this house.” If that’s how you feel, terrific. But, in my experience, even your dream home starts to sour if you feel like you paid too much, or life throws you a curve and you can’t afford it. Be prudent and careful, no one else will be for you.
5. Stay Positive
More advice easier said than done, but nonetheless true. I always liked Max Ehrmann’s 1927 poem “Desiderata.” My Dad would bring it out and read it to my brother and I when he thought we were straying off the path. It starts, “Go placidly amid the noise and the haste…” and I love that. I’ve learned that lesson in Jiu Jitsu: you can’t allow the circumstances you are in force an emotional response. There are so many wonderful reasons to live in Northern Nevada that it makes putting up with a frustrating, competitive housing market well worth it. We live in a community that has largely operated well during the pandemic, and the trade-off is that a lot of people saw it and want it for their lives too. Being positive doesn’t mean you don’t have to compete, but positivity makes you MORE competitive. It allows you to put rejection into perspective, gives you the patience to deal with the leg-work involved with buying a house, and makes you one of the clients your agent can’t wait to talk to.
As always, please reach out if I can help at all, and until then, I’ll close with the final stanza of “Desiderata:”
And whether or not it is clear to you, no doubt the universe is unfolding as it should. Therefore be at peace with God, whatever you conceive Him to be. And whatever your labors and aspirations, in the noisy confusion of life, keep peace in your soul. With all its sham, drudgery and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.
