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Be Ready to Buy

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You need to be ready to buy when the market shifts. 

We still have an inventory crisis, and that will keep the market from crashing.  Pricing will continue going down as long as the interest rates continue to climb. As soon as inflation is back under control, they will drop the rates again.  When they do, you want to be ready to buy so you can enjoy the climb and build wealth.  

What do you need to do to be a ready to buy? Here are the 4 things I would focus on to best position yourself for a future purchase. 

Save your money.

You’ll need a downpayment and the more money you can put down, the better the house will be. Set aside a percentage of every paycheck, somewhere you can’t touch it, and let it build up as much as you can. If the bulk of your money is tied up in investments, I’d pull it and hold the cash so the stock market isn’t deciding how large of a downpayment you have. Of course talk with your financial advisor about this strategy, but stocks are also predicted to continue declining.  

Pay down your debts.

Your debt to income ratio is a huge part of being able to buy a house. Start with paying off your smaller debts and then wrap those payments into the larger debts. This will put yourself in as strong a position as possible.  

Work on your credit score.

This will improve naturally as you pay your debts down. You also want to make sure you stay up to date on all your payments and remove any past delinquencies that may still be showing up.  Free credit report sites can give you a quick overview, but for a better look I’d head over to one of the actual reporting agencies.  

Hone what you want to buy.

Once interest rates come back down, there will be a frenzy again because we don’t have any inventory.  Knowing exactly what you want to buy will put you in the best position to immediately jump on it when it comes on the market.  

This market is different than anything we have ever seen before, and as such we are all learning something new everyday.  If it were my money, I’d be buying homes as soon as the interest rates hit 5.5%. If you want to talk about a buying strategy, or what this could mean for you, please reach out!

Want to meet with us? You can schedule with us HERE

Is this a good HOA?

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Buying a home could mean dealing with a homeowners’ association. This begs the question, how can you tell if the HOA is doing a good job? Watch to find out!

HOA’s manage, maintain, and regulate everything that is outside of the home — Such as the structure of the building, the common areas, the landscaping, and the recreation areas, if they have them. But unlike the membership of other community organizations, you can’t resign if you’re unhappy with the way the organization is run.

If the community you are searching in passes these 4 checks, you are probably in good hands!

#1 – Community looks nice

If the community looks good, it usually means that something positive has impacted the community. Of course, the opposite is also true. If you’re thinking about buying into a community, take an objective look at its appearance. Is the structure of the building in good repair? Are the trees pruned, the beds weeded and the landscaping well maintained? Is the pool clean? Are any of the homes in the community eyesores? Your answers to these questions reflect on whether the HOA is performing its duties properly and requiring homeowners to do the same. The proof, as they say, is in the pudding.

#2 – Strong Communication

This is your community and you have every right to know what’s going on in it. Do your research. Figure out how the HOA board communicates with homeowners. The options are numerous and include newsletters, websites, annual reports and emails. Check for flyers advertising community meetings. If homeowners are invited to attend committee meetings, it’s a good sign that their input is heard and valued.

#3 – Strong Money Management

The best HOA’s put checks and balances in place to safeguard against the risk of financial mismanagement. They employ a second set of eyes – someone not on the board – to collect the dues, pay the bills, and review checks and invoices to make sure the HOAs financial affairs are in good order. Often the second pair of eyes is a professional property manager, a lawyer, or an accountant on staff. We also want to be sure that they have a clear budget for addressing repairs, whether it is unforeseen circumstances or scheduled maintenance.

#4 – Clear HOA Rules

HOA’s tend to have a set of rules called Covenants, Conditions, and Restrictions. CC&R’s supercede city, county, and state laws and come with hefty fines if they are violated. So it’s really important to know if you’re moving into a community with a strict HOA. CC&R’s are meant to be applied objectively and fairly throughout the community – but sometimes they’re only enforced if a neighbor complains. The best way to tell if CC&R’s are applied consistently (or not) is to take a tour around the community. If everyone’s landscaping is immaculate, the HOA is probably very strict. But if some homes look run-down, and others don’t, it’s a good sign that the HOA is pretty lax on enforcing their rules.

Now that you know what to look for, let us help guide you into the perfect community! Even if that means avoiding HOAs all together! Contact us below!

Ready to get started? You can chat with us, or our lenders! Learn more about them over on our preferred lenders page

Pro Tips:

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How to Buy a Home when you need to Sell

So you are ready to move? Whether it is downsizing, upsizing, or just getting into a different area, needing to sell first can feel like a huge obstacle. Luckily we have 11 awesome tips to help you buy before you sell so this transition is as smooth as possible!

You can download our full guide, or continue below to read the highlights!

Buy when you need to sellDownload

Tip 1:

Get a Bridge Loan

If downpayment and closing cost funds are keeping you out of your dream home, consider a short term loan. A bridge loan will give you cash to use towards your next purchase.  This allows you to purchase a home with no additional contingencies!  After you move, you use the funds from the sale of your current home to pay the loan back.

Tip 2:

Use a HELOC – Home Equity Line of Credit

This is one of the most common strategies that we are seeing.  Use the equity in your home to get a line of credit to pay for your new home.  This also allows you to purchase first with no additional contingencies.

Tip 3:

Buy New Construction

Builders commonly have additional inventory allowing you to plan out your move date in advance.  This allows you to line up the closing of your current home and the closing of your new home with some overlap to ensure you only move once.

Tip 4:

Custom Build a Home

Similar to buying new construction, this allows you to line up your closing dates and your moving dates. Most custom home builders have in-house financing that will allow you to sell your home and build simultaneously.

Tip 5:

Borrow from your 401K

This allows you to temporarily pull a “loan” from your 401k.  Having this loan allows you to have the cash on hand to make strong offers with no additional contingencies. There are some special circumstances so be sure to discuss this option with your financial planner and/or CPA.

Tip 6:

Seller Carried Financing

This isnt a very common option, but if the seller owns the home outright, they will sometimes carry a short term loan for you while you wait for your home to sell.  This option requires an attorney and usually has higher interest rates associated with it.

Tip 7:

Negotiate a Lease Back

With a strong sellers market, we can list your home and ask the new buyers to give us time in the home after it has sold.This can give us an additional 60 days to find and close on your new home.

Tip 8:

Use Sale Subject To

With a strong sellers market, most buyers just want to “win” a home.  We can ask to have a close date that is subject to you finding a replacement property.  Most people want to have some idea of how long that will take, so we often see in contract within 60 days.  This is a great option especially when paired with a rent back.

Tip 9:

Look in Less Desirable Areas or Price Ranges

If you don’t have a strong preference for a certain area we can focus on locations that are not as competitive.  This allows us to have more control in our offer terms and closing dates. Also, if you have some pricing flexibility, we can find price ranges that don’t have as much competition.

Tip 10:

Write a Contingent Offer

We can write an offer that is contingent upon the sale of your current home.  This allows us to find the home you want before putting your home up for sale.  Depending on market conditions, it can be difficult to have this extra contingency accepted.

Tip 11:

Rent for a Bit

If you want to sell at the peak of the market and have additional time to look for a home, this can be a great option.  Find a short term rental to move into to remove the timeline crunches of finding a new home.

Now that you know your options, are you ready to see what your home might be worth? Or are you ready to see what options are on the market? You can do both right here!

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Or, if you would rather chat with us before jumping right in, fill out the form below and we will get back to you right away!