Let's face it. The real estate market is influenced by forces of supply and demand. And right now, the number of homes available for sale is lower than those demanded resulting in a seller's market. So how can you get an affordable house?
Many sellers have withdrawn their homes from the market due to the uncertainty caused by the pandemic. This is creating a major hurdle for buyers working on a tight budget.
Buying a home in a seller's market can be intimidating. Multiple offers on a single property are common. And this can lead to bidding wars that push property prices up. But that is not to say you should stop pursuing your dream- homeownership.
Real estate experts say that if you play your cards right, you can still get an affordable house in a seller's market. Wondering how? Read on.
Ditch The Society Pressure
When buying a home, it's always wise to buy a less house than you can afford. The reality is that you may not need that big space you think you do. Society expectations are to blame for this mentality.
American culture tends to make us believe that we must buy things to reflect our personalities and values more than functionality. That's why many people would rather take on debt to buy a lavish house instead of starting small.
But if you want to attain financial freedom soon, ditch the society pressure and chart your own path. It will be not easy but it will be fulfilling in the end.
Embrace DIY Repairs
In a seller's market, buyers know they must move fast to get a good house. As a result, many tend to get turned off by houses that need repairs, whether minor or major. This creates an opportunity for buyers who are willing to invest in DIY.
Some houses need major repairs and can be costly, like replacing a roof and revamping an entire kitchen. But we're not talking about these repairs.
Many houses on the market need minor repairs like repainting and tweaking a few things to reflect your preferences. You can get these homes at friendly prices.
And when you invest in 'do it yourself repairs', you will save more money since you will only be spending money on materials, not labor. What's more, every improvement you undertake will increase home equity, meaning your hard work will earn you money in the long run.
Get Started Working Toward Your Affordable House ASAP
Just because homes requiring repairs are more likely to be ignored by other buyers doesn't mean you relax. Remember in a seller's market buyers have few options. This means some of them will also choose to overlook minor repairs.
With that in mind, if you want to increase your odds of finding an affordable house, start your hunt early. And when the right deal presents itself, act quickly.
Don't Wreck Your Budget
When bidding wars start, it can be tempting to blow your budget to buy your home. However, financial experts warn that buyers who do this are more likely to do more harm than good.
Getting dragged into bidding wars can worsen your financial situation since you will have to find another way to increase your budget. And if you're already struggling financially, you may be forced to take on more debt.
So don't get carried away till you forget your financial goals. Keep in mind that your monthly payments should not exceed 25% of your take-home pay.
Getting an affordable house in a seller's market may be challenging, but that doesn't mean it's impossible. By being creative, you can increase your chances of buying a home you can truly afford without blowing your budget. We hope these strategies help you get an affordable house to call home soon. Good luck!