Keep your head in a torrid homebuying market.
After renting for five years in the Shadle Park area, Ashley and Dan Marlow decided to buy a home. They talked of reducing their commute time, and owning a home close to good schools, with a big yard for Eva, their dog.
But in a seller's market, where the number of buyers exceeds available homes for sale, they found home prices skyrocketing and panic setting in.
The Marlows found a house with a big kitchen and tiny yard they thought they could settle for. One family member cautioned the house was all "lipstick and rouge," but the hot market scared them. The Marlows made an offer.
"We had friends engaged in furious bidding wars, losing to more aggressive buyers," said Ashley, a marketing specialist at STCU. "We felt pressure to buy quickly."
After a few days, Ashley and Dan began having doubts. They retracted their offer and hoped something better would come along.
It did. A home with a huge yard and "tons of character" came available in an area they liked, with good schools and a modest commute.
"Don't buy into the pressure," Ashley says. "Figure out what your essential criteria are — price, layout, neighborhood, and amenities — and stick to them."
Jeff Mularski, a real estate manager at STCU, coaches homebuyers — particularly first-time homebuyers — to avoid emotional connections when home buying.
"Take it slow and select the home that fits you the best, because buying a home is a long-term investment," he says.
Beyond basics of identifying a potential home, securing a mortgage, making an offer, and finalizing paperwork, Mularski urges homebuyers to follow five steps that help keep emotions in check:
"Don't buy into the pressure," Ashley says.
- Apply to prequalify for your home loan. Most lenders have a preapproval process that will tell you how much house you can afford. With that information, he says, you can avoid emotional offers on homes priced above your budget.
- Steady your finances. Once you're pre-approved for a loan, avoid getting new credit cards, switching jobs, or other hiccups in your finances that might disrupt your eligibility for a loan, Mularski says.
- Instead ... save, save, save! Once you move into your new home, you likely will need funds for improvements or unforeseen repairs.
- Hire a Realtor. Between securing your pre-approval and shopping for a home, seek out a trusted Realtor. "You can do your own shopping for a home online, but a Realtor will counsel you and navigate you through the negotiating process to get you into the house you want," Mularski says.
- Check your emotions at the door. Finally, no matter how hot the housing market may get, don't feel pressured to buy a home that you may regret later.
Your home should be filled with laughter and joy, not regret. Keep a cool head when the market gets hot.