How Much Time do you Need to Save for a Down Payment?

One of the biggest hurdles homebuyers face is saving for a down payment. As you’re budgeting and planning for your home purchase, you’ll want to understand how much you’ll need to put down and how long it will take you to get there. The process may actually move faster than you think.

Using data from the U.S. Department of Housing and Urban Development (HUD) and Apartment List, we can estimate how long it might take someone earning the median income and paying the median rent to save up for a down payment on a median- priced home. Since having a down payment can be a great time to practice budgeting for housing costs, this estate also uses the concept that a household should not pay more than 28% of their total income on monthly housing expenses.

According to the data, the national average for the time it would take to save for a 10% down payment is right around two and a half years (2.53). Residents in Iowa can save for a down payment the fastest, doing so in just over one year (1.31). The map below illustrates this time (in years) for each state:

What if you only need to save 3%?

What if you’re able to take advantage of one of the 3% down payment programs available? It’s a common misconception that you need a 20% down payment to buy a home, but there are actually more affordable options and down payment assistance programs available, especially for first time buyers. The reality is, saving for a 3% down payment may not take several years. In fact, it could take less than a year in most states, as shown in the map below.

Bottom Line:

Wherever you are in the process of saving for a down payment, you may be closer to your dream home than you think. Let’s connect to explore the down payment options available in our area and how they support your plans.

February 2021 Market Activity

Check out market activity from February!

While there is a decrease from previous years in New Listings, the number of pending sales is up by 51.6% compared to the previous year and sold sales is increased by 35.2%.
Looking at this February compared to past years, the number of condos/TIC/coop on the market has decreased by 16.7%. If you thinking of selling, now could be the time with a decreased number of condos on the market.
The number of pending condo/TIC/coop sales has skyrocketed this February compared to previous years, explained by the current hot real estate market.
The number of sold listings was increased for February, again explainable by the increased market activity in recent months

The real estate market, specifically focusing with condos, tic, and co-ops for February continues to be hot. In the past few months, the market has seen much increased activity with the number of pending and sold sales. If you are considering buying or selling your condo or home, there is no better time than now! Feel free to reach out to discuss the current market, or for any advice!

Sources: San Francisco Association of Realtors

How to Make a Winning Offer on a Home?

Today’s homebuyers are faced with a strong seller’s market, which means there are a lot of active buyers competing for a relatively low number of homes and condos available. As a result, it’s essential to understand how to make a confident and competitive offer on your dream home. Here are five tips for success in this critical stage of the homebuying process.

  1. Listen to your Real Estate Advisor

An Article from Freddie Mac gives direction on making an offer on a home. From the start, it emphasizes how trusted professionals can help you stay focused on the most important things, especially at times when this process can get emotional for buyers:

“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must- haves and future financial stability.”

2. Understand Your Finances

Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to get pre-approved for a loan early in the homebuying process. Only 44% of today’s prospective homebuyers are planning to apply for pre-approcal, so be sure to take this step so you stand out from the crowd. Doing so make it clear to sellers you’re a serious and qualified buyer, and it can give you a competitive edge in a bidding war.

3. Be Prepared to Move Quickly

According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), the average property sold today receives 3.7 offers and is on the market for just 21 days. These are both results of today’s competitive market, showing how important it is to stay agile and alert in your search. As soon as you find the right home for your needs, be prepared to submit an offer as quickly as possible.

4. Make a Fair Offer

It’s only natural to want the best deal you can get on a home. However, Freddie Mac also warns that submitting an offer that’s too low can be lead sellers to doubt how serious you are as a buyer. Don’t make an offer that will be tossed out as soon as it is received. The expertise your agent brings to this part of the process will help you stay competitive: “Your agent will work with you to make an informed offer based on the market value of the home, the condition of the home and recent home sales prices in the area.”

5. Stay Flexible in Negotiations

After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. You can strengthen your position with an offer that includes flexible move-in dates, a higher prices, or minimals contingencies (conditions you set that the seller must meet for the purchase to be finalized) Freddie Mac explains that there, are, however certain contingencies you don’t want to forego: “Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold as-is which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

Bottom Line: Today’s competitive market makes it more important than ever to make a strong offer on a home. Let’s connect to make sure you rise to the top along the way.