Michigan Mortgage Lender Gives Tips on Buying a Home During Inventory Shortage
For the last two years, the Michigan real estate market has been experiencing low inventory conditions which has been limiting buyers’ choices.
And many real estate experts and chief economists are predicting a sellers market for 2019, with millennials continuing to be the driving force in real estate. Couple that with rising interest rates and you have buyers that are determined more than ever to jump in the market before the rates increase again.
You can still find a home in a seller’s market. You just have to plan, research and be creative with the low inventory that is available.
First, Get Pre-Approved
This is always a good idea, regardless of what the market is doing, so you know what types of properties are in your price range.
A pre-approval in a tight market lets the seller know you are serious. Plus, knowing what you can afford, you could shop for homes slightly under your total budget and then offer above the asking price if you need to compete with other buyers.
Increase Your Search Radius
After you are pre-approved you know generally what neighborhoods to shop in and you probably are set on one or two. Instead of downsizing and forgoing luxury features for the sake of a zip code, consider looking just outside that area. Often buyers find they can buy a larger and newer home if they are willing to get creative and shop in nearby neighborhoods. You never know, your dream home could be just a few miles away.
Research Expired & Withdrawn Listings
This is where an experienced real estate agent can be a huge help as they may know of homes that were recently on the market but never sold.
These listings could have been expired and withdrawn for a number of reasons. Perhaps they were overpriced at the time. Either way, these homeowners may still be open to selling, so it is worth having your agent start a conversation with them and make an offer.
Contact the Landlord of Rental Homes
In addition to owners of withdrawn listings, owners of rental properties may be willing to sell, even if their property isn’t necessarily listed. It depends on the landlords situation. Perhaps they decided to rent out their home as a quick solution to a divorce, but they would be interested in selling. You never know until you ask. And in a seller’s market, sometimes you have to get creative.
Consider New Construction Homes
The forecast for 2019 predicts an increase in new construction home inventory. Often buyers, especially first time buyers, do not even consider new construction as they think it is way out of their price range. But they may be a better deal than you think.
The average new home went for $324,467 in June 2018, which is 28 percent more than the average $254,200 price for existing homes, according to data from John Burns Real Estate Consulting LLC, cited recently by Prashant Gopal of Bloomberg. The pricing gap between new and existing homes is shrinking and is expected to continue to decrease as the prices for existing homes continue to rise.
Contact Michigan Mortgage Lender, Julie Krumholz
Shopping for a home in Michigan?
Julie Krumholz is a mortgage lender that serves Oakland County, Macomb County and the entire state of Michigan. She has over 30 years in the mortgage industry and brings a wealth of experience to her clients. Contact Julie today by calling 586-382-5482.
Contact Julie today by calling: 586-382-5482