Buying a house is challenging during the best of times. Throw in a global pandemic and dreams of homeownership can seem entirely unachievable. There is hope, though. And if you are hoping to buy a home in 2021, doing so is an achievable goal. The process just looks a bit different now than it has in years past, and extra effort is required to ensure success.
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Whether you are looking to move away from Charleston rentals and find a historic home of your own or you’re dreaming of owning beachfront property, now could be a great time to secure an amazing rate and make your goal of homeownership a reality.
Plan to Navigate a Seller’s Market
Right now, a reasonably priced home in good condition is a hot commodity. In most parts of the country, there are more prospective buyers than there are sellers. This means you will likely be competing against plenty of other people when making an offer on a home.
As a buyer, now is a time to be flexible and willing to make some concessions. It’s also a wise decision to work with an experienced Isle of Palms realty company rather than trying to buy a home on your own. A real estate agent will guide you through the process and help you make a strong offer likely to be accepted.
Also, understand that prices are going up. The price of existing homes is likely to increase by 3.1 percent in 2021. While this is lower than the 6.7 percent jump that happened in 2020, it is still worth noting. Home prices tend to be highest in June and July, so you may want to consider shopping earlier to get the best deal.
Make Sure Your Finances Are in Order
If there is one thing the pandemic hasn’t changed, it’s that having your finances in order is crucial in the home buying process. Before you even start browsing homes for sale, you need to get everything in order and get pre-approved by a lender.
Lenders are being a bit more careful right now about who they loan money to. Though vaccines are being distributed and helping people get back to work, banks and other financial institutions are still wary of lending to anyone who might lose their job or experience a significant decrease in income due to the pandemic. If you are dreaming of buying a home, you will need to prove beyond any shadow of doubt you have the financial means to do so and are in a stable job.
Organize documentation about your income, debt, bank accounts and employment. Check your credit report, too, to make sure your score is good enough to qualify and there aren’t any mistakes you need to dispute. Once you have everything together and are sure your credit report looks good, apply to get pre-approved. Your pre-approval will let you know how much you can borrow and help you ascertain how much home you can afford.
Be Prepared for Digital House Hunting and Buying
The COVID-19 pandemic has changed how people shop for and sell homes. Socially distancing requirements and other regulations turned the process upside down in 2020, but through technology, it has been possible to overcome many of the challenges. With virtual tours, Zoom meetings and online closings, the real estate industry is still going strong. Things just look a bit different than they used to.
While regulations surrounding the coronavirus vary by city, state and county, things like large open houses have mainly ceased in efforts to keep people safe. Real estate agents are also much less likely to take prospective buyers on in-person tours of several properties now than they were in the past. When house hunting, be prepared to substantially narrow your search down online before viewing a home in person.
Depending on what lender you choose, you may also do most (or all) of your paperwork online. While nearly all lenders now allow you to obtain pre-approval online, many are now equipped to handle mortgages from pre-approval all the way through closing via the web.
Make an Offer
Once you have seen a few places and found one you are interested in buying, you need to make an offer. This sounds easy enough, but there is a difference between an attractive offer and one the seller is not likely to accept.
This is where working with a real estate agent comes in handy.
The agent will help you prepare an offer letter that includes the price you are willing to pay, along with your pre-approval letter from your lender, proof of available funds for a down payment and any contingencies. They may recommend adding a personal letter, too, to set your offer apart from other offers.
If the seller accepts your offer, schedule a home inspection. Based on the inspector’s findings, you may want to renegotiate your offer. If major problems are found, the lender will likely require they be dealt with before finalizing your loan.
Secure Financing and Close
It takes up to 30 days to complete the financing process, and it is vital to keep your credit and finances in order during this time. Promptly respond to requests for additional documentation, and make sure all info is correct before submitting anything. Talk to your real estate agent if you have any questions or concerns.
As soon as all contingencies have been met and the closing agent has given the approval to close, it’s time to close on your new home. During this final step, your loan will enter “clear to close” status. You will also handle the final paperwork and submit payment to cover the closing costs and your down payment.
Buying a home is a challenging process, but it can be done–even in the midst of a global pandemic. With patience and help from a great real estate agent, you can achieve your dream of homeownership in 2021.