In a hot market where inventory remains at historic lows and areas across the country are ranging between many different price points, it can be hard for first-time homebuyers. One group it’s particularly hard for right now is Millennials. Millennials aren’t exactly getting a warm welcome from the market that has been begging them to participate.But that doesn’t make buying impossible – just a bit more challenging. Let Corken + Company give you a leg up by following a few smart strategies.
Work with the right Agent:
Having a competitive edge is more important than ever. You must have a savvy, experienced, and well-connected real estate agent to help you buy a home. Our team has years of experience in the Colorado market and can help make this process a breeze for you.
Work on your down payment:
There’s a good chance you’ll be competing against buyers who are coming in with an all-cash offers, which you’re going to have a hard time standing up to. But, there are ways you can make your offer look better. If it comes down to a multiple-offer situation for their home, sellers won’t just compare the offer prices. They’ll look at your down payment and the terms, and you need to have better terms than your competitor. You may only have 3.5% down, and that may be all you need to qualify for your FHA loan, but that doesn’t mean the seller will embrace you.
If you’re ready to buy and there’s no time to get a second job or go into hyper-savings mode, you can always take advantage of down payment assistance programs like the National Homebuyers Fund or hit up a relative. “If you’re struggling to pool enough cash for your down payment, a generous relative or friend can help by giving you money,” said NerdWallet. “But the money must be a true gift, not a disguised loan, and it must be documented properly through financial statements and a gift letter. If the gift is really a loan that you have to pay back, lenders won’t accept it.”
Be flexible on the closing:
If another potential buyer is insistent on a 30-day close, but you could close earlier, later, and even rent back to the seller if need be, you just might end up with the house you want. Flexibility is key to submitting a winning offer. Make sure you have a Plan B like a place to stay for a few days or longer if you’re going to be between houses, and a mover/storage option squared away.
Look in adjacent neighborhoods:
You might have your heart set on a specific neighborhood. But if it’s just not working in your favor, consider the next neighborhood over. Experts say they have great potential upside.
Consider the worst house on the block:
Buying the ugly duckling is a top strategy for investors and one that can get buyers in the door if they’re having trouble securing a move-in-ready home. While some home buyers prefer move-in-ready homes, they are stuck with the choices the previous homeowner or builder picked for their countertops, fixtures, and floors. Not only do buyers of fixer-uppers get to select their finishes, but they also can make sure the work is done the way they want.
If you’re worried about how you’re going to pay for all those renovations, ask your real estate agent or lender about a 203(k) loan, which rolls renovation funds into your mortgage. “An FHA 203k loan, (sometimes called a Rehab Loan or FHA Construction loan) allows you to finance not one, but two major items 1) the house itself, and; 2) needed/wanted repairs,” said The Mortgage Reports. “Because the lender tracks and verifies repairs, it is willing to approve a loan on a home it wouldn’t otherwise consider.”
The loan addresses a common problem when buying a fixer home: lenders often don’t approve loans for homes in need of major repairs.”
Waive contingencies before you submit your offer?
Note the question mark. Your real estate professional may caution you against this strategy. But, lenders like Better Mortgage are making it work with a program that “allows buyers in select markets to not only underwrite their finances but also get the appraised value of their home before they submit an offer. That means they have the option to waive both financing and appraisal contingencies to make their offer as competitive as cash.”
Find more strategies for first-time homebuyers at: