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‘Outbid on three houses!’ Doc frustrated by crazy market


 

6. Firm up your budget.

While the preapproval process will tell you how much a lender thinks you can afford, it typically makes sense to come up with your own budget as well. That’s because banks and other mortgage lenders may approve you for much more than you want or are able to pay for a home.

You’ll want to factor in future costs of homeowners as well as any other (current or future) expenses for which the lender may not have accounted. For example, if you’re planning to have children soon, you may want to lower your budget to factor in the cost of childcare.

Knowing your budget ahead of time, and looking only at houses that fall within it, will prevent you from falling in love with a house that you really can’t afford.

7. Stick with it.

Buying a house in today’s market is no easy task. The first part of the process requires simply looking at multiple houses to get a sense of how far your budget will go and whether there are homes that meet your requirements.

If you’re sure that purchasing a home is the best financial move for you, don’t give up. Instead, consider whether you can make adjustments that could widen your pool of potential homes. That may mean changing your budget, moving a little further out geographically, or opting for a house that needs a little more work than you expected.

That said, while the pace of price increases will likely moderate, it’s unlikely prices will go down significantly in the future.

“We might see home price appreciation subside to levels close to 10% to 15% [from 20% last year] or even just 5% to 10%,” Ms. Losey says. “When you do the math, home prices just can’t continue to go up 20% year over year.”

Dr. Kobe is planning to keep looking for his home for at least the next several months.

“Prices are still going up, but we are hearing that the inventory will increase over the summer,” he says. “I’m still out looking for the right house, and I’m ready to make an offer.”

A version of this article first appeared on Medscape.com.

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