Courtesy of Realtor.com
There are few things more stressful than buying a home. That’s probably why nearly everyone who’s been through the home-buying process is happy to give you some advice.
It’s a nice gesture, really. It’s just not always helpful.
The problem is that when you’re talking about something as fluid as the housing market, the rules change quickly. As such, there’s a good chance that any advice you get—no matter how great it was at one point in time—is now outdated.
So now that 2019 is well underway, it’s high time to point out some home-buying advice that once worked well but has passed its expiration date. Of course, it varies by market, so check with your real estate agent to be sure, but by and large, you should take these once-wise words below with a huge grain of salt.
Wait for spring
There’s no doubt you’ve heard this piece of advice before. “Who wants to move when the temps are low and when there are so few homes on the market?” Despite what you’ve been told, though, Sebastian “Seb” Frey, a licensed real estate broker in the Silicon Valley area, says this advice is actually pretty outdated. There’s no need to wait!
“Yes, there’s more inventory [in the spring] but there’s more competition for it, and sellers are more optimistic about getting a higher price then and so less willing to negotiate,” he says. “Buy when you find the right property that will meet your needs for today—and the next five to 10 years.”
When it comes to your dream home, don’t let a small factor like the weather make decisions for you.
Wait for home prices to settle down a bit
Likewise, if you live in an area that’s been more of a seller’s market over the past few years, you may have been told to wait until the market (and those sky-high prices) settle down a bit before really beginning your search. But Frey says that’s now bad advice. The reason? Rents are alsohigh.
“Paying high rent now and hoping that you’ll find a better deal two or three years down the road [won’t work],” he says. Instead, he says, “The better advice is to make a smart buy today for a property that will appreciate over the long term.”
Entering a volatile home-buying market may sound scary, but it’s important to look at the long-term repercussions of waiting.
Focus mainly on the type of house you want
Traditionally, you figured out what kind of house you needed (How many bedrooms and bathrooms? What size garage?), and then went looking for it. The house itself was the main attraction, and the neighborhood was just an extra factor you considered down the line.
But Daniel Martinez, a real estate agent in Houston, says that in 2019, that method is completely backward. Instead, you should find your future neighborhood first, and then see what houses it has to offer.
“The way cities and communities are evolving cannot be ignored, and we see this shift reflected in home buying,” he says. “My advice to buyers is to go beyond measurements. Before looking at homes, take tours of neighborhoods and narrow down areas that are the best fit for you and your needs. Then find homes that you can afford within those pockets. Ultimately, the property doesn’t make someone happy, it’s the life and the community the area holds that makes and creates the happiness you’re looking for.”
New construction is always the best choice
In the past, buyers have been told that if they have specific wants or needs, new construction was the way to go. It makes sense—if you’re hand-picking every finish and knob, it probably will end up being exactly the house you had in mind.
However, New York real estate agent Fiona Dogan, with Julia B. Fee Sotheby’s, says that as we move forward in 2019, new construction may no longer be your best bet.
“New construction is slowing nationwide, so while home buyers last year may have turned to building in order to obtain their dream home, 2019 is the year of the renovation!” she says.
“Now, you should identify homes that—with a little bit of work—will meet your needs. You can find a great house, invest just a small amount of time and money, and end up with a place that’s just right for you and your family. The right real estate agent will help you identify properties and help you envision what’s possible.”
Make an offer with room to negotiate
Once upon a time, it was a smart move to make an offer on a house that was just a bit under the price of what you were actually willing to pay. That way, you had room to negotiate when the seller came back with a higher offer. But real estate professionals say that’s not the way you should be thinking anymore.
“The housing market in 2019 will be slightly different from what we experienced in 2018 when it comes to pricing and negotiations,” says Howard Margolis, an associate real estate broker with Douglas Elliman, in New York. “In regards to negotiations, what was once the premise of offering 10%-15% below asking is not necessarily the case anymore, and it’s a strategy I would not recommend. In today’s market, a truly motivated seller is less inclined to engage in the back-and-forth of a real estate transaction, and listings are priced closer to the final sale price.”
A better bet is to base your offer on comps—aka similar property sales in the area. Home sellers know what their house is worth and aren’t likely to bend to a lowball offer.
Whatever offer you make, do it fast!
The housing market in recent years has been a nightmare for buyers in many areas—but times are changing.
“For the most part, 2018 was a seller’s market, meaning there were tons of buyers and not a ton of homes for sale. This resulted in a lot of multiple-offer situations,” says Mark Cianciulli, real estate agent and co-founder of The CREM Group in California. “During this very competitive time, many real estate agents were advising their clients to write offers as soon and as high as possible—sometimes without even seeing the home.”
But this reality is waning—and that’s good news for buyers. Cianciulli explained that toward the end of 2018, buyer exhaustion started to set in—meaning buyers got sick of bidding high and still losing. This meant those high-priced houses went untouched, and prices are finally starting to fall.
“In 2019, I would advise buyers to take their time, appropriately assess the home and its price, and write an offer based on what you and your agent believe it’s worth,” he adds.
Of course, if you find a house you love, it’s still not advisable to dawdle—but you don’t have to move at lightning speed this year, either.
The American Dream is house with a white picket fence
If you’re ready to settle down into a home—especially if you have a family—you know exactly what you’re supposed to be looking for, according to popular standards. At least three bedrooms in the middle of a nice neighborhood, with large closets, a good-sized yard, and a white picket fence. It’s the American Dream—at least, that’s what you’ve always been told.
Except, according to Heather Schuck, a real estate agent in Austin, TX, and founder of TheShiftAgency, that’s not always possible in today’s market.
“With low inventory and a competitive market, you have to get creative,” she explains. “Owning a home can take many forms, whether that’s splitting the purchase of a duplex with another couple, buying a town home near campus that can be rented out down the road, or perhaps a fixer-upper. A first home doesn’t have to have a picket fence, it just needs to be a good financial decision.”