A Guide to the Spring Home Buying Season
The spring season, more often than not, sees the real estate market buzzing with more activity than usual. For sale signs displayed on posts become a fairly common sight, with buyers and real estate agents scouting local neighborhoods for possible leads. The market is typically filled with inventory, and buyers are found looking for great deals. Given the widespread use of the internet, this medium simplifies the entire process considerably.
When is Spring?
Spring does not come at the same time in all American states. For instance, while spring in New York and most of the United States extends from late March to the end of June, this is not the case in all parts of the country. In Minnesota, the spring home-buying season gets underway pretty much as soon as the snow starts to melt and might continue until May. In Sacramento, it’s usually January to May.
One of the main reasons behind people wanting to sell during the spring season is the vacation period of July to August that follows. Between the four months, April tends to find the most amount of home buying activity.
Tips to Buy a Home in Spring
If you plan to make an offer for a home during the spring season, it is important that you prepare yourself to make a quick decision. This is because the market is typically awash with competition at this time, and even a little indecisiveness can result in you losing out on the home you wish to buy. While conventional home buying tips apply even during the spring season, there are other aspects that require your attention too.
Review of Credit History and Consolidate Debt
You need to ensure that your finances are in order even before you start looking for a home. Emergency funds you keep to tide over unforeseeable circumstances should be kept aside and not included in your budget. Go through your credit report carefully and look for any possible errors. If you spot any, work on getting them corrected.
Think about consolidating your debt. With lower monthly payments, you end up improving your debt-to-income ratio. This is an important aspect lenders look at and it can help you get a better interest rate.
Select the Right Lender
If you wish to get a home loan, you get to choose from a plethora of options. These essentially come in the form of banks, credit unions, mortgage bankers/lenders, mortgage brokers, and hard-money lenders. To determine which one will work best for you, you need to pay attention to your individual circumstances and requirements. The basic aspects you need to address include interest rate, fees, flexibility in terms and conditions, as well as customer service.
Get Preapproved
Given the competition that you might face during the spring season in the form of other probable buyers, getting preapproval for a home loan gives sellers an indication that you are serious about making a purchase. The lender you select should ideally have adequate experience with home mortgages and should have different types of loans on offer.
If your monetary savings do not account for much, it is crucial that you start saving and minimize your expenses as much as possible. If you are expecting a raise, wait for it to happen before you seek pre-approval. This is because any extra spending power works in your favor, be it through a higher loan amount or better interest rates. What’s important is that you meet your lender early in the process.
Get Alerts
New properties hit the market regularly during the spring season. As a result, setting up email or text alerts based on the type of home you seek and your budget can work well for you. This way, you get notified of new listings as soon as they hit the market. The sooner you find out about a home that is up for sale, the sooner you can present your offer and close the deal. When sellers receive multiple offers, it is not uncommon for them to pay more attention to the ones they receive first.
Check Listing Websites
While setting up alerts is a good idea, it is also important that you check listing websites regularly. A significant number of homebuyers now turn online to carry out searches, which is why real estate listing websites find several takers. If you come by a listing that you find interesting, visit the property as soon as possible, and make a quick decision. If you like what you see, do not hesitate to make an offer immediately.
Don’t Focus on the Seller
When buying a home, try not to focus on what you feel about its owner, good or bad, or it may affect your ability to make a rational decision. You do, after all, wish to buy a home, and not forge a long-term relationship with its owner. Don’t let foreclosures and short sales deter you from buying a home. What you need to focus on, instead, is determining if the house you select meets your requirements.
Work With a Real Estate Agent
Do not rely on the internet too much. During the busy spring season, some properties find buyers even before they are listed online. As a result, consider using the services of a real estate agent. Work with someone who has experience and has worked in the locality in which you wish to purchase a home. This is because local knowledge often plays a key role.
Real estate agents can do more than just help you find a suitable home. They can provide information about local taxes as well as insurance costs. Since you might have to interact with your real estate agent for an extended duration, select someone you are comfortable with and one who has good communication skills. You also need to be able to voice out of concerns without feeling reluctant. Some questions you may ask when narrowing down on a suitable real estate agent include:
- What areas do you work in?
- How many homes have you bought/sold?
- Do you have a specific field of expertise?
- What type of buyers do you usually deal with?
- Do you have any offer strategies?
- How can I get in touch with you?
While you would want your real estate agent to be easily contactable, reliable, and friendly, he or she should also be tactful and assertive, especially when it comes to the negotiation table.
Offer More Than the Listing Price
It is not uncommon for buyers to offer more than the listing price during the spring home buying season. However, this approach does not work for everyone, especially when people hope to buy homes toward the upper end of their budgets. In such a scenario, you may consider looking for homes that are a little below your price range, so your offer may be slightly above the listing price.
If nothing else, prepare yourself to pay at least the list price. Some buyers pay more attention to how much the asking price of the home is instead of its actual worth. This is where your real estate agent can help, by providing details of comparable sales that give you means to arrive at a home’s actual value. Simply comparing values of asking prices is not the way to go, because sellers may ask for any amount they feel is right. Besides, if you find a home you like that is priced within your budget, paying a couple of thousand dollars more will not make a significant dent in the overall scheme of things.
Exceed the 20% Down Payment Requirement
When you are willing to put 20% or more as a down payment, it sends a clear message to sellers that you are serious about buying a home. Setting aside extra money for the down payment not only shows sellers that you have your finances in order, doing so also reduces your loan burden. People who are willing to make a significant down payment tend to have preapproval in place, which gives them a further edge. This is why older people who have more cash or equity stand a better chance when compared to younger people who have trouble putting up 20% or more as a down payment.
Offer the Seller Something Unique
Given that the spring season sees several homebuyers competing against each other, it pays to give the seller a unique proposition. The purchase offer comes with various terms and conditions. Use it to your advantage by giving the seller a benefit that has no adverse effect on your situation. Negotiations, after all, are not just about money. This is another aspect where you can turn to your real estate agent for guidance. You could, for instance, give the seller a few extra days to move out.
Are You New in Town?
If you have recently moved to a new city, town, or neighborhood, you might want to start doing some basic groundwork before the spring season begins. Talk to the people you meet in the neighborhood where you plan to purchase a home. Drive through the locality at different times of the day, and if possible, at different times during the week. Check if the area fits your needs when it comes to schools, hospitals, and public transport.
Visit multiple real estate agents to narrow down on someone who makes you feel comfortable. Do the same when it comes to looking for a reliable lender. If you are a first-time homebuyer, it is all right to be a little apprehensive about the process. What helps is that you trust your instincts. Since you tend to have more competition during the spring, do not take too long to make an offer on a property you like.
Is There a Better Time Than Spring Season?
During the spring season, Easter Sunday can work well for you. This is because not as many people are out looking at homes or making offers on this day. If you find a home that you like on Easter, consider writing an offer on the same day, because come Monday, there may well be more competition. However, this approach might not have the desired effect in non-Christian neighborhoods. Easter typically falls in between the last week of March and the last week of April. It is celebrated on the first Sunday that follows the ecclesiastical moon after the vernal equinox.
Outside of the spring season, buying a home on Christmas Day might work in your favor. This is because there are noticeably low numbers of buyers in the market in December, and Christmas tends to witness a virtual lull. The best way is to carry out your research a few days or weeks in advance, so you get to position yourself well. Considering buying a home during the holiday season may work well for you because of multiple reasons:
- Sellers are typically in good moods because of the festivities.
- Sellers might be inclined to be more generous in their negotiation because it’s the season to give.
- Competition tends to remain particularly low.
- Prices are usually lower than at other times of the year.
- People who wish to sell their homes around Christmas are serious about selling, giving you an advantage when it comes to negotiations.
What’s important in such a scenario is to find a real estate agent who is willing to work on Christmas and the days before. The agent should also be persuasive enough to get the seller to spare the much needed time on Christmas.
Conclusion
Buying a home during the spring season may seem like a daunting task, mainly because of the competition that buyers have to face. Fortunately, following a few simple steps and paying attention to some important aspects can simplify the process considerably. Make sure you have your finances in order ahead of time, work with a reliable and trustworthy lender, and select a real estate agent who makes you feel at ease. The rest should then just fall in place.
