3 Tips on Buying a House in Today’s Market. Is this the right time to buy a house? High home price
TIP NUMBER 1
On buying a house is to know your numbers. What numbers am I talking about? Well, first of all, for you to buy a house, you have to know your numbers in the sense of how much can you afford, how much of a down payment you have, and what is the current interest rate. Because all these three numbers combined will make a big difference in how much you can buy or how much you can afford to buy, or how much the bank will give you the loan. Let me explain it further. So let’s say you want to buy a house in Anaheim Hills in a million-dollar range because you think you have $200,000 down, which is 20% down. And let’s say the interest rate was 4% and you wanted to buy a house for a million dollars. In that case, your principal and interest payment on a million-dollar house with a 20% down would be $30,819. At 5%, which is closer to where the interest rate is today. As of August, it would be $5,300 approximately. And at a 6% interest rate, your payment would be $5,800 a month. Now, you may say, well, the maximum I can afford is about $3,800 a month payment based on what your lender told you and assuming that you don’t have $200,000 and you only have, let’s say, $150,000 or $160,000. So by knowing your numbers and if you want your payments to be $3,800 a month and you can’t afford a million dollar house because you don’t have the 20% down if you buy a house for $800,000 versus a million dollar house at 20% down, which you will need $160,000, your payment comes out at $3,800. So this is what I mean by knowing your numbers. The best way is to talk to a lender. Start preparing for the down payment for when you want to buy the house. And start looking for areas where you want to buy the house and where that house you can buy for $800,000 or $900,000. Or could be a condo for $500,000. At least in Orange County. Because you can’t get a whole lot for $500,000 today in Orange County. And the median home price in Anaheim Hills and pretty much in Orange County is right around a million dollars.
TIP NUMBER 2
On buying a house in today’s market, if you’re having a hard time finding a home within the budget that you’re looking for, you may want to think about expanding your area a little bit. Of course, there’s an increase in inventory right now compared to last year. The inventory has gone up, which gives you more time and areas to work with. So if you’re not finding your dream home in the area that you’re looking for. If it’s too expensive, or if it’s too old, or if it’s not the right house that you’re looking for, you might want to extend your search to, let’s say if I’m looking for Anaheim Hills, you may want to look for adjoining cities in Orange or Placentia or in Yorba Linda where the price is maybe more, maybe less, we can expand your area. The other thing you can do as far as expanding your search takes out some of the restrictions that you have, all your dreams or your wants that you have. Let’s say you’re looking for a house with a view and you can’t find it in your budget. You may want to let go of the view because the view homes cost more. Or you’re looking for a home with a large yard. It’s going to cost you extra for a larger yard. So you may want to go with a smaller yard. Or you may be looking for a newer home versus an older home. But if you can find something in your price range, whether it’s 600,000 or 700,000, or $800,000, be gentle with your dreams. The good thing is to get a house. Get the payment going. At least you have a house within reason, because of course, you’re not going to get ten out of ten. As I say, when you marry, if you get a nine out of ten, it’s better than looking for a ten out of ten and not marrying at all. So find a home that you can afford, be gentle on your restrictions or your wants, and you will find the house of your dreams. Good luck to you.
TIP NUMBER 3
Always work with a buyer’s agent. Don’t do it alone. According to Nar National Association of Realtors, more than 92% of all the homes sold every year are sold through a real estate agent. So that has some value. Here are some other reasons why you want to work with a real estate agent. Maybe like me, you’re looking at Anaheim Hills. Or if you’re looking for somebody, I’ll be glad to refer you to some other agents. But the reason you want to work with an agent to find you your dream home is that it doesn’t cost you anything. Agents know the local market, they know the local trends, the local communities, what’s going on with developments, etc. That may give you some insight into what you may not know, especially if you’re coming from out of the area. The other thing agents do is sell 5-10-15 homes a year over and over again. You may be selling or buying one or two homes in your lifetime career. So they know what is involved in negotiating the contracts, what to expect, what not to expect, what the seller may ask, and what the buyer should offer. So those negotiating skills and getting the right terms and conditions for you during your situation. Your time and your interest rate are very important. That’s why you have to worry about an agent, you will not lose any money and you will speed up the process of buying a home.
It’s still a housing seller’s market. Acting strategically in this housing market is the best place for you. Low inventory, even in June 2022, and high buyer demand. Even with the high-interest rates, the seller is in control, it’s still a seller’s market. And if it’s a seller’s market, you will get a better price when you sell your home.
It has been low and what the experts are saying and from what we are seeing from the grounds, inventory is still going to remain low. There’s plenty of demand. There are not enough builders building homes out there. Buyers are tired of paying high-interest rates. So they want to buy a house. There’s money out there and buyers have money. They’ve made money in stocks, and there’s a lot of equity money, and there’s a lot of inheritance money. People are making money in business. So there’s money out there. There’s demand out there. So as a seller, this may be the best time and most competitive time to take advantage of the high prices and the terms and conditions that you want. So let’s discuss further, just to give you an idea, in Anaheim Hills, as of today, June 9, 2022, there are only 77 homes for sale in the Multiple Listing Service, of which I’m a member. I did a video about a year ago. At that time, I said inventory was very low. It was only 33 homes for sale in Anaheim Hills.
Inventory has gone up from a year and a half ago, but in normal times, there are 150 homes for sale. Right now, there are only 77 homes for sale, and 55 homes are in escrow as of today, which means it’s a seller’s market. Wow. What is your strategy and plan to take advantage of this high-demand market? Low inventory market.