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Fournier Law Blog

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First Time Home Buyers Face Many Real Estate Challenges

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First time home buyers who decided that 2020 would be the year they would leap into home ownership were met with a variety of challenges, economically, personally and emotionally.  Obviously, the pandemic has had effects that are wide-reaching; the real estate market has not been immune.

In an article published in the Chicago Sun Times, the effects of COVID-19 on the real estate market are detailed.  To begin, as fears of becoming ill with the coronavirus spread, home inventory dropped as homeowners feared having strangers in their homes for showings.  In fact, the inventory dropped 20% in June in comparison to June 2019. 

Nevertheless, there were still many Americans searching for homes and with mortgage rates falling, many more prospective home buyers began to enter the home search as well.  With the influx of buyers searching the low inventory of homes, buyers found themselves in competition with other buyers; homes were purchased quickly and sometimes secured offers above their asking price.

This type of real estate market can be intimidating and frustrating for anyone trying to purchase a home.  However, the impact on first time home buyers has been significant.  The price of homes has risen faster than incomes, making more and more homes unaffordable for these prospective home owners.

To help prepare mentally and financially for the bumpy road that may lay ahead for these first time home buyers, article details some important tips and reminders for first time home buyers and their agents. 

These buyers should expect some disappointment in the home buying process and be aware that they might not be successful in purchasing a home immediately.  However, it they stay the course, most likely, the results will eventually be in their favor.

To avoid the emotional pitfalls of home buying, buyers should know up-front how much they are willing to spend on a specific home.  This will allow them to walk away before over paying or letting a deal fall through over a few hundred dollars.

An important step to take to prepare for the home purchasing process is to get pre-approved for the loan.  Knowing a buyer is pre-approved can help a seller feel more confident about the buyer’s ability to complete the purchase and can give the buyer a leg up on competition.

If the current state of the real estate market is too overwhelming and homes are beyond a buyer’s financial reach, the last bit of advice is to consider waiting.  Perhaps the market conditions will change in the next few months and a buyer can secure some additional funds for a down payment to put down on that perfect home.

Read the entire article.

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