Everyone wants to buy a house right now.
Mortgage interest rates are at an all-time low, and the pandemic pushed a lot of people to make big changes in their lives. Add that to a lack of supply and you've got a sizzling hot housing market.
If you're looking to sell your house right now, you're sitting pretty. If you're looking to buy, there are some things to know. For advice, we turned to Stacy Miller-Kuiper, VP branch manager of Ruoff Mortgage in Grand Rapids. Here are five things to consider while the market is still hot!
Make the best offer you possibly can.
When you're up against 20 other buyers, you need to stand out. Of course, being able to make the highest offer is ideal, but there's more to it than that. Your first move should be getting pre-approved. There's no time to wait in a hot market, and no one's going to accept an offer without a solid pre-approval letter.
If it takes a while to land the right house, don't stress—that's just more time to save for a bigger down payment, which could end up landing you the home of your dreams. The more you can strengthen your pre-approval, the better.
An appraisal guarantee can help too! Banks will only lend as much as the home is appraised for, which means if it's appraised for less than your agreed-upon price, the seller will want you to make up the cost. An appraisal guarantee is an agreement that you're prepared to come to the table with those additional funds. If this sounds scary, you can set a limit on how much you're willing to pay, but the more the merrier.
Work with the best.
Reputation makes a big difference, especially in West Michigan. Sellers and their agents want the best possible experience, so they want you to be working with the best.
"No one wants to work with an out-of-state internet lender," Miller-Kuiper said. "When you're recognized as a solid lender with a good reputation and follow-through on communication, I think that helps offers."
If you're working with an experienced lender who closes quickly and knows the real estate agents in town, that's ideal. Even without prior connections, a good lender can reach out to the listing agent and vouch for you directly, while explaining their process and how they work.
Make use of rock-bottom interest rates.
"When I started the business in the mid-'90s, we were coming down from 9%, so I never thought I would see rates below 6%, let alone in the threes. They're very attractive interest rates."
You don't have to sell or buy a house to take advantage of this. Consider the wonders of refinancing your mortgage—if done right, you could save piles of money.
As Miller-Kuiper advises, refinancing isn't ideal for everyone, especially if you're just planning to use it as a debt consolidation tool. However, if your rates are 4% or higher, you might as well look into it!
Refinancing can allow you to pull cash out, which you can then use on renovations or remodeling, making your house even more valuable (and more pleasant to live in while you're there).
It's called a "seller's market" for a reason. If you're a homeowner, demand is high and you control the supply, which means people will be fighting to buy your house.
Maybe the kids have left the nest and it's time to downsize. Maybe you've renovated the house and now it's time for all that hard work to pay off so you can upgrade! Either way, 2021 is a great time to make a change.
"Buying a house is highly emotional," Miller-Kuiper said.
We spend most of our lives in our homes (especially in the last year). They're massive investments, both financially and emotionally. That can make hot markets incredibly stressful, as you're fighting with strangers over who gets to live in the house you've already fallen in love with.
Parts of this process will be out of your control, so patience is key, for your own sake.
To speed up your home buying journey—in addition to the tips above—Miller-Kuiper also suggests networking. Quite a few people buy homes from an acquaintance or colleague, avoiding the mess of the market altogether.
Just remember: After all the hard work and patience, you'll eventually have a new house to call home.
Written by Josh Veal, Contributing Writer for West Michigan Woman.
This article originally appeared in the Jun/Jul 2021 issue of West Michigan Woman.