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With skyrocketing housing prices, homeownership may be out of reach for many Americans.

Yet rents are also rising. So how do you know if you should own a home or rent? It depends on a number of factors, experts said.

“If you’re not sure whether or not you want to rent or buy right now … it’s better to make your decision based on your personal situation and your personal needs,” said Lexie Holbert, housing and lifestyle expert for

Home prices jumped 19.2% year over year in January, according to the S&P CoreLogic Case-Shiller Index. Meanwhile, single-family rental homes gained a record 12.6% in January from 12 months prior, according to CoreLogic.

On top of rising prices, mortgage interest rates are also soaring, hitting their highest level in more than three years last week.

When it comes down to the numbers, it’s generally more affordable to own a home, but the gap in affordability is shrinking as interest rates rise, according to ATTOM, a real estate data tracker. Owning the median-priced home is more affordable than the average rent on a three-bedroom home in 58% of the country, ATTOM reported in January.

To be sure, affordability is an issue for many. Fully 64% of nonhomeowners said it’s holding them back from owning a home, including 43% who believe their income levels are not high enough, a Bankrate survey found. High home prices and the inability to swing a down payment and/or closing costs were also constraining buyers.

Here’s what to consider when making a decision whether to own a home or rent.

Timing is everything
Before you consider buying, think about where you are in your life. Are you looking to settle down somewhere for a while or will you be moving in a couple of years?

The general rule of thumb is it takes about five years to seven years in a home to recoup the purchase costs, Holbert said. That includes closing costs, which add between 2% and 5% to the purchase price.

“If your home needs are going to be pretty consistent and pretty stable over the next few years, now may be a really good time to buy for you,” she said.

“If they’re changing, you may want to consider renting so that you have the flexibility to move.”

Check your finances
Ask yourself if you are financially ready to own a home. That includes having enough emergency savings in case something happens in your first year of homeownership, Holbert said. You should also have enough monthly income to afford the mortgage payment, taxes and insurance, as well as extra monthly expenses like utilities.

Check your credit report, as well, since your credit score has a direct bearing on the mortgage you’ll get and interest rate you may pay. If you see any mistakes, get them corrected before you apply for a loan.

If you can’t afford the monthly payments, continue to rent and keep saving money if homeownership is your ultimate goal, Holbert said. If high rent prohibits you from saving, consider downsizing or making other big lifestyle changes so you can start putting more money aside.

“You’ll read that if you cut back on your $4 latte habit, it could really help you save for a home,” she noted.

“While it’s really good to save, where you’re really going to find that big cash for that down payment is going to be in those big spending categories, like housing or your car.”

Know your number
Figuring out what you can afford if you were to purchase a home is especially important now as home prices are rising, Greg McBride, chief financial analyst at Bankrate.

This way, you have boundaries set around your home shopping.

“The position you won’t want to be in is falling in love with a home and getting your offer accepted and then having to figure out how to pay for it,” he said.

Check out homes in your price range on sites like or Zillow to determine if they fit your needs.

You can also use online calculators to help you make a financial determination between renting and buying, including those from SmartAsset, NerdWallet or

Also, keep an eye on rising mortgage rates, Holbert warned. The Federal Reserve has indicated it will increase interest rates six more times this year, which, in turn, impacts mortgage rates. That’s why, if you are currently in the market to buy a home, it may be better to do so now before rates and prices climb higher, she said.

Just don’t get caught up in FOMO — or the fear of missing out. That could lead you to regret your purchase and put you in a financial bind down the road, McBride said.

“The novelty of that house will wear off; the mortgage payments will not,” he said.

Souce:, Michelle Fox

WASHINGTON (March 23, 2022) – The share of millennial home buyers increased significantly over the past year. They are also the most likely generation to use the internet to find the home they ultimately purchase and most likely to use a real estate agent.

This is according to the latest study from the National Association of Realtors®, the 2022 Home Buyer and Seller Generational Trends report, which examines the similarities and differences of recent home buyers and sellers across generations.1 The NAR report found that the combined share of younger millennial (23 to 31 years old) and older millennial buyers (32 to 41 years old) rose to 43% in 2021, up from 37% the year prior. Almost two out of three younger millennials – 65% – found the home they ultimately purchased on the internet, a number that gradually decreases with older generations. Eighty-seven percent of all buyers purchased their home through an agent. This number was highest with younger millennials (92%) and older millennials (88%).

“Some young adults have used the pandemic to their financial advantage by paying down debt and cutting the cost of rent by moving in with family. They are now jumping headfirst into homeownership,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “While young buyers use new tech tools, they also use real estate agents at higher rates than other buyers to help find the right home and negotiate the terms of the transaction.”

Buyers from all generations agreed about the top reasons for using an agent: they wanted help finding the right home to purchase, negotiating the terms of sale and negotiating the price. The silent generation – those between the ages of 76 and 96 – as well as younger millennials were also more likely to want their agent to help with paperwork.

Those between the ages of 42 and 56 – Generation X – had the highest median household income at $125,000. They bought the most expensive and second-largest homes at a median price of $320,000 and size of 2,300 square feet, respectively. Older millennials purchased the largest homes at 2,400 square feet, and the silent generation bought the smallest at 1,800 square feet. Across all generations, the largest share of buyers purchased in suburban areas (51%) and small towns (20%).

“Not surprisingly, younger generations typically upgraded in size and price while older generations purchased more affordable properties,” Lautz said. “The majority of all generations bought single-family homes at higher shares than other housing types, and younger buyers dispelled the myth that they are flocking to city centers. When it comes to location, the suburbs and small towns are the places to buy.”

Three out of five of recent buyers – 60% – were married couples, 19% were single females, 9% were single males and 9% were unmarried couples. The highest share of unmarried couples were younger millennials at 21%. Single-female buyers significantly outnumbered single-male buyers across all generations. The highest percentage of single-female buyers was in the silent generation at 27%.

The study also found that first-time home buying among younger generations is on the rise, with over 4 out of 5 younger millennial home buyers – 81% – purchasing for the first time. Just under half – 48% – of older millennial buyers were first-time buyers.

“While the pandemic allowed many potential buyers to save for a down payment, demographics played a key role,” Lautz said. “There is a wave of millennial buyers who are aging into the traditional first-time buyer age range.” Boomers made up the largest share of home sellers at 42%, although the percentage of millennial sellers is on the rise, increasing from 22% to 26% over the past year. Lautz noted that for the first time it is now more likely for an older millennial to be a first-time seller than a first-time buyer.

“Many factors can contribute to the decision to buy or sell a home,” Lautz continued. “For all home buyers under the age of 57, the main driver was the desire to own a home of their own. Among those 57 and older, the desire to be closer to friends and family was the top reason, followed by the desire for a smaller home.”

Younger generations tended to move shorter distances when relocating. Among all ages, there was a median of 15 miles from the homes where recent buyers previously resided and the homes that they purchased. That distance was lowest among younger millennials (10 miles) and highest among older boomers (35 miles).

Overall, buyers expected to live in their homes for 12 years, down from 15 years last year. For younger millennials and the silent generation, the expected duration was only 10 years, compared to 20 years for younger boomers.

Debt continues to be a significant barrier for many when attempting to buy a home. Both Generation X and younger boomers delayed purchasing a home for five years due to debt, the longest of all age groups. Younger millennials had the highest share of student debt at 45%, with a median amount of $28,000. Twenty-seven percent of younger millennials cited that saving for a down payment was the most challenging step in the home buying process, compared to just 1% for older boomers. Nearly one in three – 29% – of younger millennials received down payment help in the form of a gift or loan from a friend or relative and 24% lived with friends or family, directly saving on rental costs.

Despite this hurdle, a vast majority of buyers have a positive outlook on homeownership. Eighty-six percent of all buyers reported they viewed a home purchase as a good investment, and roughly nine out of 10 people – 89% – said that they would recommend their agent for future services.

“A truth across all generations is that homeownership is seen as a cornerstone of the American dream,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable. Home buyers continue to turn to Realtors® as a trusted resource for helping find the right home and successfully navigating this increasingly complex process.”

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

# # #1 Survey generational breakdowns:

Generation Z: (ages 18-22); younger Generation Y/millennials (ages 23-31); older Generation Y/millennials (ages 32-41); Generation X (ages 42-56); younger boomers (ages 57-66); older boomers (ages 67-75); and the silent generation (ages 76-96).

Source: National Association of Realtors

This real estate market is unlike anything we have ever seen before. With too few homes for too many buyers, bidding wars are common, driving up prices. Adding to the pressure, mortgage interest rates have shot up, and just crossed the 4% threshold for the first time since 2019.

Rates averaged 4.16% for 30-year, fixed-rate loans in the week ending March 17, according to Freddie Mac. That was a significant bump.

This pressure cooker situation has completely changed the rules of financing a home, and savvy borrowers can’t just do things the way they have in the past. To help, we asked lenders to share the new rules for getting a mortgage today, as well as the old rules to ditch.

Heed the following advice, and you’ll gain the edge in this ultracompetitive market.

Old rule: Nab the best interest rate without paying points

New rule: Purchase points for a lower rate

In recent years, when mortgage rates were lingering at historic lows, there was no need to use points to buy down that percentage of interest charged. But now, with interest rates rising, “buying mortgage points is a simple way to lower your mortgage’s interest rate and save money long term. If you have the extra funds at the time of closing, it can be worth it to buy mortgage points,” says Daniel Osman, head of sales at Balance Homes. “This will lower your monthly house payment and save you money long term.”

Let’s spell out how this works in a little more detail: Points are an upfront fee you pay to get a lower rate over the life of your home loan. Typically, 1 point lowers your mortgage rate by 0.25% and it costs 1% of your loan amount. So if the current interest rate is, say, 4% on a $500,000 loan, if you pay 1 point, or $5,000, upfront, your interest rate will be reduced to 3.75%.

But does it really save me money, you might be asking? It sure does. Here’s some math for you: If you obtain a mortgage for $500,000 on a $600,000 home at a 4% lending rate, then pay 1%, or $5,000, to lower your rate to 3.75%, you’ll pay $71.50 less per month and save over $25,000 over the loan’s life. That’s a wise move, says our math.

Old rule: Get a pre-approval before submitting an offer

New rule: Ask for a mortgage commitment instead

If you are at all familiar with the homebuying process, you are probably aware that getting a pre-approval is essential before submitting an offer. After all, a pre-approval tells the seller that a lender believes that you will be eligible for financing once your application has been reviewed by an underwriter.

However, to get an edge in today’s market, you may want to ask your lender for a mortgage commitment instead.

“A mortgage commitment is granted by an official underwriter. This means that there will be fewer conditions on the buyer’s financing,” explains Robert Killinger, a senior loan officer with inside sales at Mortgage Network in Boston. “It allows the transaction to move more seamlessly and for the seller to receive their money faster.”

That said, Killinger warns that getting a mortgage commitment takes a bit longer than simply asking your lender for a pre-approval.

“Borrowers typically need to supply all supporting income and asset documents to the lender. Those documents then have to be reviewed and signed off on by a member of the underwriting team.”

In other words, if you’re going this route, you need to plan in advance.

Old rule: Target homes at prices you can afford

New rule: Target homes at prices below your top budget

In the past, buyers were able to let list prices reflect how much they would probably pay for a property. However, these days, inventory is so limited that prices are rising quickly. Buyers are offering well over the listing figure in order to win. In this environment, it’s incredibly easy to spend more than you can afford on a home.

To avoid getting in over your head, work closely with a mortgage lender (or broker) well before you start making offers.

According to Nicole Rueth, senior vice president and producing branch manager of the Rueth Team with Fairway Mortgage in Englewood, CO, you should collaborate with your lender to set a budget as you seek pre-approval.

“Buyers should have very honest conversations with their lender about what they can and cannot afford,” she advises. “They should make sure to factor in that they will most likely have to offer above each property’s list price. Then, once they have a better idea of what they can realistically afford and they know their limits, they’ll be ready to make a strong offer when they find the house they want.”

Jerry Koors, president of Merchants Mortgage, a division of Merchants Bank of Indiana in Carmel, cautions that buyers today will also need to factor rising interest rates into their budget.

“Lenders should be able to estimate what their clients can afford by interest rate,” he says. “Sharing that information will ensure that borrowers know what to expect if rates continue to rise and how an increase will affect their buying power.”

Put simply, no matter what your budget ends up being, the more information you can gather before entering this crazy market, the better.

Old rule: Don’t bother with down payment assistance

New rule: Take all the help you can get

Traditionally, down payment assistance programs were meant to help first-time homebuyers and those with lower incomes access homeownership. Many of these programs still have requirements that must be met in order to receive the funds. Given how tight and tough the housing market currently is, you may want to investigate whether or not you qualify.

“Buying a home is a huge financial undertaking, especially in competitive markets like the one we’re experiencing,” says Sean Grzebin, head of consumer originations with Chase Home Lending in Jacksonville, FL. “Buyers who are having trouble coming up with the cash for their down payment and closing costs should ask their lender about available down payment assistance programs. Often, these programs can help cover those costs by providing grants or other forms of financial assistance.”

Bottom line: It never hurts to ask! With home prices going through the roof, every little bit of assistance helps.

Old rule: All loan programs are created equal

New rule: If possible, choose conventional financing

Offers with financing used to be viewed as all pretty much the same. It didn’t matter whether you were using a Federal Housing Administration loan, a Veterans Affairs loan, or a conventional loan to buy the property. In each case, you had roughly the same amount of bargaining power as everyone else who needed a mortgage.

These days, however, the game has changed. Sellers are definitely revealing their preferences.

According to Rick Robertson, a certified mortgage planning specialist with Axia Home Loans in Bellevue, WA, buyers should opt for conventional financing whenever possible in order to give themselves a leg up in this tough market.

“If there are multiple offers, conventional financing usually wins,” he says. “Conventional financing typically offers more flexibility and latitude than FHA and VA loan programs. For example, satisfying the appraisal requirements on a government-backed loan can be more challenging than a conventional financing appraisal. Certain types of properties, particularly condominiums, may also impose additional financing requirements if an FHA or VA loan is involved.”

Unfortunately, bidding wars are more common than not these days. In order to put yourself in the best possible bargaining position, you’ll need to make things as easy as possible for the seller. While a conventional loan program may not be an option for every buyer, if one is available to you, you should consider that first.

Source:, Tara Mastroeni

A favorite pastime of many buyers scrolling through real estate listings—or walking through an open house—is fantasizing about what life could be like in that home.

You might spot a swanky “Mad Men”–style bar that would be perfect for book club nights. Or maybe you’ll begin planning the feasts you could whip up with that six-burner stove! And what about the garden’s burbling fountain? Ah, that sound would be perfect for falling asleep to every night.

But here’s the thing every buyer should know: When it comes to house hunting, what you see isn’t necessarily what you get. Indeed a seller can rightfully haul off some items you may think automatically come with a house you purchase. So here’s a helpful reality check before your imagination runs too wild. (Bonus: We share tips to keeping some of those fixtures you absolutely love.)

What’s included in a home sale?

Precisely what comes with a home is not cut and dried, and each state has its own set of guidelines regarding this issue. But there are some guiding principles.

“If an item is attached, it is considered a fixture and by default should stay with the house,” says Dj Olhausen, an agent with Realty ONE Group in San Diego. “On the other hand, if an item is not attached, it may very well leave with the seller.”

If that still seems vague, “fixture” is a real estate term used to describe items that are physically attached to the house via nails, screws, bolts, glue, cement, or electrical wiring. Standard fixtures inside the home include ceiling fans, blinds, plumbing and heating elements, and built-in appliances. Outside the four walls, items that generally stay put include mailboxes, shutters, backyard office sheds, and in-ground landscaping.

Attachment issues

You might assume a refrigerator that looks built-in stays with the house or that the sellers will take their kid’s swingset with them. That’s where the acronym MARIA can help you identify fixtures:

Just keep in mind there are some common-sense exceptions to the definition of “attached to the property.” For example, let’s say the owners have a dresser that’s bolted to the wall to prevent it from toppling over on a toddler, or they have bookcases attached with earthquake straps to keep them from tipping over. In those cases, the actual furniture isn’t considered a fixture.

What about outside the home?

“In general, any object attached to the ground is considered a fixture, while anything that can be moved freely will be deemed personal property,” says Olhausen.

Still, when you are touring a home, it may not be apparent if something is attached or not.

“So when it comes to deciding if an outdoor item is viewed as a fixture or someone’s property, ask yourself if it can easily be removed without the use of tools,” says Olhausen.

For example, electric vehicles typically require hardwiring and electrical system upgrades for a charging station.

“I have found that some sellers are taking the connector [a portable, plug-in charger], but the electrical setup stays with the property,” says Wendy Gladson, a real estate consultant at Compass in Marina del Ray, CA.

Personal property that will definitely leave on moving day includes items like potted plants, sheds that lay freely on the ground, or any item that can be moved without being disassembled, according to Olhausen.

Everything is negotiable

You may really want that coat and shoe organization unit that fits perfectly in the entry hall or maybe that beer fridge in the man cave. So remember, there is wiggle room when it comes to what stays and what goes in a home sale.

However, the local housing market may dictate how far you get when you try to negotiate. In a cooler market, buyers have more leverage when asking for items. But you might not get the extras you want in a hot seller’s market.

If you’re still confused, don’t worry—you’re not on your own trying to figure out what stays or goes. Your buyer’s agent will know what fixture exclusions are explicitly stated in the multiple listing service, and will also help you negotiate for items you want.

“Just do not assume anything,” says Suzi Dailey an agent with Realty ONE Luxe, in Laguna Niguel, CA. “If you want something, it should be written into the contract.”

Source:, Lisa Marie Conklin

A home warranty is a renewable home service plan that protects your home systems and appliances — like HVAC systems and hot water heaters — when breakdowns occur. While homeowners insurance policies often only cover catastrophes, warranties are designed to help pay for the things that wear out or break from day-to-day use. 

How does a home warranty work?

A home service plan is purely elective, but it’s a smart purchase, according to Raj Midha, senior vice president and general manager at American Home Shield, a home warranty company. A typical policy will run a homeowner between $50 to $75 a month. Even with that low price tag, Midha says they can pay off big in the end. “Let’s say your HVAC system stops working. In that case, a qualified, independent service contractor will be assigned to assess the problem,” he says. “If it’s determined that the system is no longer working because of age or wear and tear, and the breakdown is covered under the terms of your service contract, the repair professional will make the repair, or if necessary, replace the appliance or system component for just the cost of your service call.” 

With Midha’s company, that savings could vary based on the coverage you’ve selected for your policy. “A one-time service call costs either $75, $100, or $125 based on the amount you choose in advance when you become a member, and American Home Shield pays the remaining amount for the repair or replacement based on the plan that you have selected.”

Here’s what it won’t cover.

Each plan is different, which is why Midha says it’s important to understand the specific coverage limitations of your policy. “In general, a home warranty does not cover events like fire, smoke, theft, fallen trees, or damage caused by weather, which are covered by home insurance,” he explains. 

Who benefits most from a home warranty?

People with new construction properties or recently updated homes may think that there’s no reason for them to purchase a home warranty for their home since their appliances are new, but Midha says they’re a great investment for any homeowner. “They are suitable for any type of customer, due to the wide range of options for customization and add-on coverage, but may be an especially wise decision for homeowners on a set budget, owners of older homes, or recent home buyers who opted to waive their inspection contingencies,” he explains. “The protection of a home service plan can save you hundreds or even thousands of out-of-pocket dollars, as well as the headache of finding a trusted service contractor to make the repairs.”

Who doesn’t benefit from a home warranty?

Of course, not everyone will get the most bang for their buck with a home warranty. Because most warranties are contingent upon the homeowner having properly maintained the items, some of your most expensive appliances may not be covered due to a previous owner’s neglect. Additionally, when you opt to use a home warranty to cover your appliances, you may not get a say when it comes to picking the brand used to replace items that are damaged beyond repair. And lets not forget, similar to an insurance policy, you’ll pay your annual premium for your warranty regardless of whether you need any repairs or replacements. Some people may feel like that money could be better spent being tucked into an emergency savings account to be applied to a wider range of emergencies. 

How does a home warranty differ from a home insurance policy?

An easy way to differentiate a warranty from insurance is that homeowners insurance protects against things that might happen, explains Midha (like fires, theft or natural disasters). Warranty plans, on the other hand, protect against things that will happen due to normal wear and tear (like broken down ovens and air conditioning units that have cooled their last hot afternoon).

Here’s how to get your own.

While they’re often advertised as a perk when you’re looking to purchase a new home, you can purchase a policy at any time. “Once you purchase a plan, you can start using your home warranty after the 30-day waiting period, which is an industry standard,” Midha says, adding that if you’re looking to purchase a plan yourself, you should look for a well-established provider committed to transparency in coverage terms, service procedures, and pricing.

Source: Apartment Therapy, Lauren Bank

Every house hunt starts with a dream, one that can easily escalate into pure fantasy. Homebuyers, particularly first-timers, often harbor visions of purchasing the perfect house, in a great neighborhood, for a bargain price.

All that might have been achievable—with some luck—in the past. But in today’s hot seller’s market, once buyers move beyond mooning over listings to making an actual offer, things can get jarringly real all too fast.

As a real estate agent, I see this wake-up call regularly. So do my colleagues.

Peter Cantine, a real estate agent in the Catskills where I live, says many of his clients want “a house with seclusion, views, and a water feature,” for a budget of about $300,000.

“In this market, $300,000 will get you a hammock—just the hammock,” he says. “Want a hammock that sleeps two? That’s 400,000!”

Jokes aside, we’re not here to discourage you from house hunting, and we’re certainly not angling to dash real estate #goals. We simply want to help homebuyers succeed by pointing out certain overblown expectations we see consistently in our line of work.

Here are a few homebuying dreams that may need a reality check today.

1. Your dream home will have everything you want

With historically low inventory, the so-called perfect home—if and when it does come on the market—has so many buyers lined up that, even if it started at a “great price,” it will most likely go into a bidding war. So that means it won’t be perfect after all, right?

Having an open mind is key: It’s understandable that you want to avoid a gut renovation or a long commute to work, but a willingness to make cosmetic changes or drive even 10 minutes farther than planned will substantially help your cause.

2. There’s time to find a mortgage after you find the house

While house hunting can be fun, finding a mortgage feels more like a chore. Still, if you save the financing step until after you’ve found the perfect home, there’s nary a chance the home will still be available by the time your loan paperwork comes through.

“Your first call when even thinking about maybe purchasing should be your bank,” says Haden Riggs, a Keller Williams agent and team leader in Tyler, TX. “They will line everything out and put you in the best position to purchase.” 

There are many important reasons why you need to have your mortgage pre-approval before making your first viewing appointment. One, it gives you a guidepost: You might qualify for a larger loan than you thought you would, or in some cases, less. Also, due to COVID-19, many markets have made buyer financial statements a requirement to schedule a showing—and this trend is likely to continue, as it helps sellers separate the looky-loos from the serious buyers.

“If an agent shows you properties without a pre-approval, they probably aren’t the best agent,” says Riggs. 

And what happens if you’re just window-shopping, then find a home that checks all your boxes, and you want to make an offer immediately? You can’t submit a competitive offer without your proof of funds.

Because interest rates are so low right now, even cash buyers should consider obtaining a pre-qualification just in case they fall in love with a home that exceeds their liquid budget. It’s so easy to call your banker and secure one on the phone in less than an hour.

3. You can handle the homebuying process on your own

Thanks to the internet, you can do preliminary sleuthing without a real estate agent, and it’s a great way to educate yourself about the market where you’re searching. But beware: There’s no substitute for an agent’s training, guidance, and experience. 

The fact is, a local real estate agent can more accurately assert what constitutes a “good deal,” and can speak to factors like location a lot more confidently than a homebuyer. Real estate agents also have access to crucial notes shared on the multiple listing service, including need-to-know issues such as “This property is located on a flood plain” or “Price reflects that the home needs a new roof.”

4. The seller will fix any issues that come up in the home inspection

Traditionally, a house-proud seller will be more inclined to remediate most problems. But in a seller’s market—which is still most of the country right now—not so much, especially when sellers have backup offers and buyers willing to waive the inspection altogether.

So be realistic. If there are major structural issues, evidence of radon or mold, or serious plumbing problems, you may be able to negotiate the price, but not always. 

Take heart: While an inspection is meant to shed light on any and all maintenance issues and real or potential defects, many of the smaller “flags” will likely be forgotten once you move in. Expecting a seller in a competitive market to address every line item is a delusion that could cost you the house.

5. The asking price is probably what you’ll pay

The prevalence of bidding wars over the past few years has resulted in a reverse pricing strategy that can be frustrating for real estate agents and buyers alike.

In order to maximize interest in a property, many seller’s agents have employed a “bargain basement” starting price in anticipation of a bidding war driving up the price.

In some markets, it climbs way up. In high-demand areas across the nation, $100,000 to $200,000 above the list price is not unusual. If the cost for a beautifully renovated, spacious home in a fantastic location seems too good to be true, chances are it is a delusion.

6. Can’t find the right house? It’s easy to build one instead

The real estate market is challenging homebuyers across the United States. Many real estate agents are seeing client interest in land purchases with the belief that building a home from scratch will somehow be less painful than slogging through the listings and surviving bidding wars. It’s a lovely fantasy, but make sure to do your homework.

“If you have all the time in the world and the patience of a Tibetan monk, building is for you,” says Riggs.

But beware: Many building materials are back-ordered due to supply chain disruptions, and priced at all-time highs. There’s a general labor shortage across much of the U.S. Plus, depending on the parcel, you’ll have to hire professionals to conduct tests to determine if you can build on the land, and you may need to add infrastructure for electricity and septic systems, for starters. The costs can be astronomical, and the process could take many months. Here’s more on how long it takes to build a house.

Source: Erin Flaherty

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