How to overcome home buying worries.
By Erik J. Martin
CTW Features
From sweating the down payment, to fretting about interest rates creeping up, to worrying about overpaying, homebuyers face a lot of fears today – particularly in a market where sellers seem to have all the leverage. But with the right help, an organized approach and a positive mindset, they can feel more in control and better manage the process, according to the experts.
Make no mistake: buyers feel pretty stressed nowadays. A new Owners.com study indicates that 72 percent of prospective buyers polled anticipate stress in the home purchasing process. Their top concerns? Worry over losing an earnest money deposit (chosen by 64 percent); becoming “house poor” (61 percent); and the price going up due to bidding wars (59 percent).
“With high home prices, low inventory and increased competition in many markets, it’s not surprising that the financial aspects of buying a home are worrying for many people,” said Michael Lissack, a Greater Boston-based real estate agent and Owners.com spokesperson.
Gloria K. Frazier, president/broker with ERA American Real Estate in Shalimar, Fla., agrees.
“The main reason the process is so stressful is because buyers are having to make decisions quicker than they are comfortable with, plus most second-guess how good the idea is of bidding over asking price,” Frazier said. “Fear of loss is more powerful than opportunity for gain, so buyers become too competitive in bidding wars, make poor decisions and then regret it when they’ve won the war.”
And for those buyers that find it hard to make quick decisions, they can lose out on several homes or get totally discouraged and bow out of the market completely, according to Frazier.
Other factors that can ratchet up the pressure include appraisals coming in below the sale price and sellers demanding that you commit to the purchase price, even if the appraisal doesn’t support that demand, according to Rich Cebulak, a Chicago-based broker with Baird & Warner.
“Also, there’s social pressure – the thought that ‘my friends, neighbors or coworkers paid over asking price, so why shouldn’t I?’” Cebulak said.
His remedy for these and other tensions is simple: choose experts you can trust.
“Always work with experienced professionals, including a Realtor, loan officer, real estate attorney and property inspector,” Cebulak said. “Meet with your agent and determine a maximum bid before you even venture into the market, and ask for data to support your decisions so that you don’t make them emotionally. Have a plan B whenever possible, too, so you can be ready to adjust and stay on budget.”
Another important way to curb worry is to get your financials in order well in advance. That means checking your credit score, saving up for the necessary down payment, learning what you can afford and getting pre-qualified with a chosen lender.
“Preparation is the key to finding your dream home,” Frazier said. “Make a list of your absolute needs and another list of your wants that you could live without. Communicate that to your agent, and ask him or her to show you homes that only fit these criteria – you’ll know soon enough if you’re being unrealistic with either your needs or wants. Remember to stick to your price range, but be flexible with your expectations.”
Have a loan pre-approval letter ready when it’s time to make an offer, as well, according to Marta DuPree, broker/vice president of Keyes Company Realtors in Coral Springs, Fla.
“In addition, be prepared to make an offer when a good deal comes on the market, because a qualified buyer who has the down payment and a strong pre-approval letter ready will have a better chance of getting the contract,” DuPree said.
Lastly, keep an open mind and avoid being pessimistic and self-critical.
“Try to maintain a positive attitude, which will hopefully help you find your dream home faster,” Lissack said.
© CTW Features
