Buying a Home in 2021
Real estate is one of the best decisions you can make for your financial future, especially when you factor in the unknowns with renting. Without question, you’ll be sure to find that the financial benefit, both in tax deductions and long-term equity will far outweigh those of renting. Emotionally speaking, renting can leave you vulnerable to the whims of a landlord. Even in times like today, when homes are selling for record prices, the reward of owning and gaining equity is far better than putting that money into someone else’s investment pocket. High demand from qualified buyers and low interest rates, mean we are poised for continued growth and stability. Which is why the threat of a bubble or anything resembling the financial crisis of 2008 is not likely. If you read my article on “Thinkin About Selling your House” you know that the reason for the higher sales prices is because of a massive increase in demand. Due in large part to COVID-19 and the shift to more remote or hybrid working models. In addition, Millennial’s currently make up the largest population in the US. With growing families, requiring more space. Even buyers that gained small fortunes through cryptocurrencies such as Bitcoin are looking to diversify and put their money back into traditional assets such as a home. With the gift of hindsight, better lending practices for the last decade+ and the freedom to live further from the office, ,buyers have an incredible opportunity to make owning a home a reality.
Addressing the housing crisis of 2008 is important, not to drum up the ugly past, but to know why now is different. There is a lot to be gleaned from an experience like that and more importantly actions to be take. Measures have been put in place to ensure history does not repeat itself. With that said, for those of you that are still weary of the what the housing market has to offer, I find it important to snorkel some details of 2008 before we touch on today’s market. Let’s rewind the clock to 2008 – to a simpler time when Flo-Rida was getting people “Low” on the dance floor at weddings and the NY Giants won the super bowl. A world where side swooped bangs were all the rage and the financial world was just giving out money. In the simplest terms, bad loans we given to people that could not afford them. Loose lending practices such as “liar” or “ninja” loans were being approved without verification of assets or income. Crazy, right?! The loans were set as ARM’s (adjustable-rate mortgage) and set to start adjusting all around the same time. This lead to widespread defaults. This to say, since then things got better, MUCH better. Through tightened lending practices, income, employment and assets verifications now serve as a bare minimum in qualifying for a loan. Ensuring you don’t get yourself into a loan that you can’t afford. Additionally, interest rates were lowered and continue to hover around record lows to encourage buying and investing. Making your money go further and monthly payments more affordable. Even for a higher priced, high demand homes. We have learned a great deal since then, so, let’s take the bear market by the ears and run with it!
Getting to the Heart of the Acceptance
It’s no secret the game to offer and acceptance has changed or at least gotten more competitive. The practicalities of a closed transaction rely on a lot of financial factors, but it’s important to keep in mind the feelings and emotion that also gets wrapped up in all of it. Have you stopped to wonder why some offers win? Moreover, why some brokers might have higher odds at helping their client get accepted? I think you’ll find luck has less to do with it than you think. Many times, it comes down to down to the negotiation process and the nuance of it. Having a broker, you trust to have you back and best interests is the first step. You also want someone on your side that will dig deep and find the motivation of the seller and the sellers agent. Is it the easiest deal? Is it a the lifelong home of a seller wants it filled with a new family to grow up in? Is it flexibility and the ability to do a rent back? I go into negotiation with agents on behalf of my clients with two things in mind; is it fair and is it reasonable? My job is to position you in the best light and that often comes down to communication. I’ve had the opportunity to learn from some of the best and combine my real-life experience with my psychology background to do just that. That kind of leverage is powerful. I am here for you and you can rest easy knowing I will do what needs to be done. Those that win the offer game are the ones who are not afraid to communicate the needs of their clients and aren’t afraid to get down to brass tacks for them. In some cases, you might even find out something new about your likes or needs.
If you’re contemplating buying a home and you can, you should! Take advantage of the low interest rates, responsible lenders and brokers that will go to bat for you. Set the fears of the past aside as teaching moments and remember to be realistic. It also never hurts to put the good energy out into the universe, visualize and manifest what buying a home looks like for you. I can’t wait to help you find the perfect home for you!