Bidding wars, lack of houses and desperate buyers: How to navigate buying a home this spring

    asset management news magazine

    After looking at more than 50 houses and writing 17 offers, Taryn and Antonio Orellana recently closed on a house in Lakewood, Calif.Source: Taryn Orellana

    When pandemic life began to feel too tight inside the one-bedroom apartment Taryn Orellana shared with her husband, Antonio, she knew they had to move.

    In October, the couple decided to buy their first home in Lakewood, Calif. It was harder than they imagined.

    “There were periods of desperation, where we would make offers on houses and we weren’t even sure if this one was ‘the one,'” said 37-year-old Orellana, a nurse practitioner.

    In all, the couple saw more than 50 homes and wrote 17 offers before one was finally accepted. They beat out almost a dozen other offers and went about $40,000 over the asking price. They also blew past their initial budget by about $70,000, she said. Fortunately, it worked out and the Orellanas are happily settling in.

    Their experience is becoming the norm thanks to the limited supply of homes for sale across the country.

    There are now about twice as many working real estate agents as there are listed homes.

    “I have been in the business for more than 30 years and I have never seen a market that has been this hot,” said Glenn Brunker, president of Ally Home, which provides mortgage services and products.

    He often recommends taking a pause and doing a little soul searching.

    “Take a look at your income stream, your employers, the location you are considering buying a home and make sure that the stability of your personal situation is one that warrants homeownership,” Brunker said.

    If you are ready to buy, here’s advice from experts on how to navigate the market right now.

    Figure out your budget

    The first thing accredited financial counselor Jacqueline Cooper, founder and CEO of Financial Education Associates, asks clients is what they are paying in rent and if that is okay for them.

    “Come up with a number first,” she said. “What you can afford is going to guide not just your principal and interest payments, but taxes and insurance payments.”

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