By all estimates and gut feelings, 2018 is going to continue to present the same challenges for buying real estate as in the past few years, too few properties for too many buyers, multiple offers and finally…. heartbreak. In fact, 2018 could be even more challenging for buyers if the Fed continues to raise interest rates, which could heat up the market even more.
Here are a few things you can do to prepare to win in the real estate game in 2018:
Talk to a lender – Your first step is to find a local lender. You will typically find that local lenders tend to be more hands-on and available and can offer a variety of loan programs to fit your needs. They will help determine how much house you can afford and walk you through the approval process.
Keep your finances in order, document and keep records – This is vital as these items will have a bearing on your final approval. It is imperative that you don’t make any large purchases or open any new lines of credit. You want to make sure you have all your financial statements, tax returns and income documents ready to present to your loan officer.
Save, save, save – Although you can purchase a home with as little as 3.5 percent down, a 20 percent down payment is ideal. Either way home ownership can cost money, so saving now will help you when you buy your new home and want to make improvements or need to do any repairs.
Keep your credit clean and improve it if needed – With the Fed looking at possibly raising rates this year, your credit score will play a big role in obtaining the best interest rate you can. Pay off what you can and be extra diligent with all your credit card and loan payments. Your loan officer can help determine how you can improve your credit and put you in the best position to buy.
Consider buying a property that needs works, this could mean less competition – If you are handy around the home, maybe a house that needs a little extra TLC may be the way to go. You should have more negotiating power with the price and you can really make the home your own. There are renovation loan programs which will help you purchase less desirable properties and you can improve them to your taste so don’t shop for home beautiful, look for an ugly duckling that you can turn into a swan.
Prepare to be aggressive – If you want the property, offer at or above the list price with your agent’s recommendation. It is no secret that it’s a seller’s market. The days of low offers are far behind us. I would strongly advise hiring a buyer’s agent who will represent you in the transaction. They can help craft an offer that has real teeth but still makes financial sense for you.
Now is the time to start getting everything in order to make your move for 2018.