Whether you are a first-time home buyer, or it’s just been awhile here are some quick tips on how to pick your purchase price! Watch the 2 minute video or just read on below!
1. Get Pre-approved
The first step in your process of choosing your purchase price is to talk to a lender. You will want to get your pre-approval going. Knowing your maximum purchase price, as well as where there may be any wiggle room, will help you determine a range that you will want to be shopping in.
2. Think about what Monthly Payment will be Comfortable
Regardless of what your preapproval amount is, you don’t have to spend the top of your budget! Ask your lender to give you a breakdown of what the monthly payments will look like. It’s best to look at a few different increments within your range. Then decide what feels like a comfortable monthly payment for your mortgage and aim for spending around that amount. Remember that current interest rates are most often going to make a bigger difference in your monthly payment than the purchase price! You could be paying LESS per month for a house that costs MORE if you lock in a good low rate. Be sure to check with your lender and realtor regarding current rates and trends.
3. Factor in Competition
Recently in Portland, we had homes selling for an AVERAGE of 10-12% over list price. While this won’t always be the case, it is important to know what the competition looks like and how much over list you may have to go to win the house of your dreams. For example, if target price you want to spend is $450k but homes are generally selling at 10-12% over, you may want to focus your search between $375-$400k. Again, chat with your realtor to find out what’s happening in your market at the moment and they will help guide you on this.
Hope this helps you to pick your price! If you need any other tips and tricks for buying or selling, feel free to reach out or look Here.