As the end of 2022 draws near, real estate markets across the country prepare for the new housing season 2023 will bring. First-time and experienced home buyers alike have already begun to anticipate a competitive market, while sellers are left to speculate if the current profitability will hold. High demand versus low inventory has led to a historic surge in home prices, rent, interest, and mortgage rates, but experts suspect the market will soon cool and slow down.
If you are new to real estate, it’s helpful to know about the most googled real estate questions of 2022 beforehand to gain a better understanding of what to research and prepare for. Here are 10 of the most frequently asked questions to help you get started.
Should I buy or rent property?
Many first-time homeowners often ask the same question: should I buy or rent? The choice largely depends on your household status. Are you single, recently graduated, or interested in living on your own for a while? In that case, renting is strongly recommended over buying. It isn’t a permanent commitment, and you can easily split expenses by living with a reliable friend or roommate.
Conversely, buying a home is best for households seeking someplace permanent to settle, couples hoping to start a family soon, and established families interested in keeping property within the family name. A home is much larger than an apartment or condo, and once you pay off the mortgage, you retain legal ownership of the property.
What type of home fits my budget?
There are various types of homes, but the most popular are single-family homes, townhomes, and condos. Single-family homes are highly sought after by families with children and/or pets, while townhomes and condos are better suited for young professionals, couples, roommates, and people with smaller budgets. Townhomes and condos are also great for people with pets who cannot rent due to additional pet fees or rules prohibiting animals from living in the building.
Do I need a real estate agent?
It’s strongly recommended you enlist a local real estate agent even if you think you don’t need one. Agents have all the necessary resources, skills, and information you need to navigate real estate, and they are trained to expedite transactions smoothly and successfully. Don’t worry about the cost — an agent’s commission is paid by the seller.
How much should I put down for a down payment?
The amount depends on your budget. If you have the money for a 20% down payment while accounting for the rest of your expenses, there’s no harm in doing so. There are several benefits to a larger down payment amount:
- Lower monthly mortgage payments
- Less interest paid over the loan term
- You may not need mortgage insurance
Assess your budget and expenses before you decide on a down payment amount. If you can’t afford a 20% down payment, a 5% down payment is perfectly fine.
When is the best time to apply for a mortgage?
The general rule of thumb is to apply at the beginning of the month. Lenders prefer receiving as many applications as they can at the start of the month, affording them plenty of time to prepare everything they need to issue the final approval statements.
Should I buy in a seller’s market?
A seller’s market is one in which demand exceeds inventory, granting sellers an advantage over pricing and negotiation. Although there’s nothing inherently wrong about buying in a seller’s market, you need to assess your budget and prioritize your preexisting expenses beforehand. Keep in mind that home prices will be high, and negotiations are likely to tip in favor of the seller because of the low inventory. High demand means you’ll be facing competition from other buyers the seller can turn to.
If you find the perfect home that fits within your budget — take a moment to weigh your options before you come to a final decision. Buying property requires commitment, and you should always approach a deal with 100% certainty.
Can I change my mind on a contract?
Yes. There are a few ways to back out of a contract, but you must act quickly:
- Submit a revocation letter as soon as you’ve changed your mind before any contract has been signed.
- Use official, state-issued forms of withdrawal.
- Respond to the seller’s counteroffer with a rejection.
- You can’t cancel after accepting and signing unless the property fails to meet your contingencies.
Is the housing market on the verge of a crash?
Due to rising inflation and prices, people have speculated the market may soon face a crash. According to experts, however, such a worst-case scenario isn't likely thanks to demand continuing to exceed supply. As long as buyers outnumber available listings, the market will hold steady.
Why are home prices so high right now?
Home prices have been proportionately affected by staggering nationwide inflation. Every time inflation goes up, the Federal Reserve raises interest rates, and as those rates rise, so do mortgage rates. This chain reaction is the major reason why prices are high and will either continue to increase or eventually stagnate.
Is the housing market starting to slow down?
Based on recent trends and data, the housing market is projected to cool and slow down. High mortgage and interest rates have kept buyers at bay for some time now, but even a marginal decrease in rates and/or home prices could encourage them to resume their home search. The inventory issue isn’t getting any better, and people won’t be left with many options if they continue to wait for rates and prices to drop.
Looking for a savvy real estate agent?
For more information and advice, reach out to Rebecca Donaldson, an elite real estate agent specializing in Willamette Valley and the surrounding region. Her expertise and commitment to client satisfaction will prove invaluable to your quest for homes for sale in West Linn, Oregon, and more.