So the 2021 real estate market has been absolutely insane and we can see based on the amount of emails we get that many first time home buyers are swimming in deep waters as we speak!.
So many of the people who bought our pdf-file from the link here above from our shop, have reached out to us and asked for advice and consulting on the properties they have been interested in buying during this year.
And what is crystal clear to us in 2021 is that we have a hotter real estate market than we had in 2004-2008 leading up to the subprime mortgage crisis in 2008.
Everything is selling red hot as we speak, from tear downs to luxury houses for top dollar.
Many have maybe seen reports from the DC area that a house(a complete tear down) got 88+ offers and 70+ of them where all cash and with quick close without any inspections made for 250.000 over the 400.000 asking price.
Holy shit!, that is the first thing that comes to mind when we see waiving inspection on any property, but when it is a property in bad shape, then we get really scared on behalf of the buyer.
For most people buying a home is goanna be the biggest financial decision in their life, and as first time home buyers you are banking your future on that home purchase!.
And Houston we have a problem right now!,all hands down this is a sellers market and the buyers are being taken for a ride.
And this is also the reason that many buyers are having serious buyers remorse right now.
I would certainly if i was suffering from buyers remorse at this stage after buying a house in the past few months to put in back on to the market TODAY, and try to get 10-20% more than you paid for it.
Because the market is still red hot and will be for some time, so if you are in a situation where you have serious thoughts of buyers remorse, then sell right now and rent something instead.
I will here explain the mistake many first time home buyers make and many 3th and 4th time home buyers can also get swept away by the same bug.
The thing that happens often is that you fall in love with a house, for let us say 500.000 dollars and you think this if your forever home.
Then when the bidding starts there are 5 offers and the house price gets jacked up to 750.000 dollar 50% more than you where goanna spend on a house when your budget was 500.000 dollars to begin with and the house was listed for that price when you came to view it.
I can see this mistake happening over and over again with first time home buyers.
I can not put my finger on it, but i would say that FOMO(fear of missing out) is the big contributor to these poor decision makings, that most young couples do.
What i always told my clients when i was working as an agent, was that we decide on the best and final price on every house we bid on, and we do not go over with more than 10% from our best and final offer.
This way if the clients best and final is 500.000 dollars we can stretch the offer to 550.000 dollars but that is it!.
This way there are checks and balances in play that we can lean on, instead of going overboard and putting yourself in financial hardships for years to come.
Because the interest rates are on an all time low level right now, the feeding frenzy to buy homes are out of control, and with only half of the normal inventory of properties out on the market as we speak, the prices have skyrocketed on many properties.
And taking into consideration also the jacked up prices on lumber and other material, new home prices are also skyrocketing due to higher material costs.
When i have had clients who felt buyers remorse 6 months into a house, then i often advised them to put it back out on the market again and move away and clear their heads.
It is a big step for a couple to go from 1500 Dollars a month in rent, to a mortgage of 3000 dollars.
And now you have moved from the city/town to the suburbs and you miss your local hang out spots and your city friends.
And you will not make the commute very often to see your city friends and they will not make the commute out to you guys in the suburbs.
So basically you will lose touch with your former friends, and this will often also lead to the feeling of buyers remorse.
So many couples actually break up in a few years due to the stress of buying a property together when you are not fully ready and committed to the massive undertaking that buying a home is.
What buyers often miss, is that first you buy the house and then usually you need on many houses to start renovation and then something breaks and you are already overextend on the house financially to begin with.
So then it snowballs on from there and it gets worse.
I recommend every young couples that is looking, or even toying with the idea on buying a property together that you seek outside counsel a very experienced financial adviser that can help you crunch YOUR numbers, on what you can afford to actually buy.
Not what you think you can afford to actually buy.
It is clear that many people do not really budget for if one of you guys gets unemployed or injured so you can not find work or be able to work for a period of 12 months.
What happens then to your mortgage?.Do you know?
One thing that i recommend is to take out a mortgage insurance in case of an emergency that would cover you guys for a period of 12-18 months if you can not fully keep up with your mortgage repayments to the lender.
At least then you have the time to plan a possible move, or find another job or even get healthy if you suffered an injury of some kind.
Planning a head is Boring we are well aware of that fact but if you are grown up enough to be looking at homes, you have to then also be grown up enough to actually plan ahead.
I do recommend that you buy your property in a down market, so since markets are cyclical, you have to wait for the right moment to enter the property market.
And if you can not wait, then buy a fixer upper with good bones in an area that is goanna be hot within 5 years time.
The worst thing for a first time home buyer is to lose the home into foreclosure within 5 years time, because you where not clear on what the property would cost to handel(up keep) when you bought in in the first place.
So i am not trying to discourage the first time home buyers or scare you away from the market, but take a step back when you look at a house that is listed for 500.000 dollars and the bidding goes to 750.000 or higher, is the property really worth it?.
Also look at Trulia or Zillow on what a property was sold for the last time it hit the market, and then analyze what upgrades have ben done to the property if any?
So the KEY words will be do not get swept way by the urgency to buy your dream home quickly!.
I hope that you have taken way from this article that it is better to be safe than sorry.!.
Take care out there, and if you need consulting advice from our advisers, see the link below on how to contact us.