Three peak-season must-dos
April 27, 2017
Quick decisions can be tough, especially for first-time homebuyers. As we've said, there are pros and cons to buying a house during the peak season, and among the downsides is the pace: fast. Stephanie Hanson, senior housing counselor at Community Development Corporation of Utah, talks about getting a handle on the situation.
1. Get educated sooner, not later
“Buying in the peak season calls for you to be able to make educated decisions quickly,” Hanson says. “You really have to know what you want, and when you find it, be confident in making an offer. Getting prepared is really important.”
“Some people need to prepare now for buying a year from now,” she says. “Start talking with a counselor about how much you can afford and finding the right loan product. Having taken a homebuyer education class prior to going out there in the market and looking at homes definitely empowers you to feel comfortable with the whole process, so you’ll be doing it right from the start.”
But no matter what time of year you’re buying, get started a few months ahead, she says. “Know what you’re getting yourself into. That’s another great benefit of homebuyer education—it helps you decide whether you’re really ready to buy a home. You don't want to find that out after you bought the home, or even in the middle of the process. It’s time consuming, it can be stressful . . . it takes a lot of effort and money that a lot of people don’t realize it’s going to take.”
“Homeownership advisors are a great first stop,” she says. “They’re very knowledgeable about different loan products out there that are just not advertised. It’s a plus to have someone local to bounce things off of and talk it through.”
2. Get a buyer’s agent
“I have so many people who come into the office, and I ask the how they found their agent, and they say, ‘Oh, I liked this house, and they were the one selling it, so I called.’ You don’t want to just call the agent whose name is on the sign.” You can’t be confident that a dual agent—one serving both seller and buyer—will act in your best interests, Hanson says. “You want to find a buyer’s agent ahead of time.”
In some fast-moving markets, she says, it is not uncommon for buyers to make an offer after seeing a house online—without seeing it in person. “It varies from state to state, but there are a lot of contingencies to protect the buyer in a situation like that,” Hanson says. “Using a real estate agent is always your best protection.”
3: Get preapproved
When shopping for a home in the peak season, it’s especially important to get preapproved for a loan. “It improves your negotiating power a lot,” Hanson says. “It really strengthens your offer.”
Do not, however, take that preapproval number at face value. “The amount you get preapproved for is a lot more than you can truly afford,” Hanson warns. “The bank is trying to make money. The higher the loan amount they give you, the more money they make. There are regulations regarding that, but they’ll loan you the absolute maximum that they’re allowed. They have no concern for your budget at all.”
“After you’ve done homebuyer education,” she says, “one-on-one counseling is a great benefit. You go over your real budget and new expenses. So you know the real costs of buying a home and know your absolute maximum for your budget, not based on what the bank says.”
You may need to avoid peak season. “If you're not really ready, if you're not prepared, if you're not sure, you need to maybe avoid the peak buying season,” Hanson says. “You don't want to make a poor choice or spend more than you were planning on or can afford.”
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This article was originally published in 2014. Periodically we feature evergreen content like this from our archives.
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