With increasing talk of a potential recession on the horizon, do you worry that the changing economy will derail your plans to buy a home? It doesn't have to affect your attaining of the American Dream, though. The trick is to prepare for the unique challenges of buying in a recession and making yourself ready to take the plunge. How can you do this? Here are a few key steps to take.
1. Don't Overextend. The best way to weather a recession without placing your home at risk is to avoid overextending yourself on a monthly basis. Before you buy a house, you should put yourself in the best position to be successful in any economy by reducing other expenses to provide wiggle room in your budget. Then, when you do set a purchase price range, avoid overspending by purchasing a home below your maximum budget.
2. Build Up Savings. A savings buffer provides security against job loss during a recession, but it also helps during the home buying process. How? For one thing, you may be vying for properties wanted by real estate investors, so the more you can bring to the table quickly, the better. In addition, homes that have been foreclosed or abandoned may need renovation to get them back to their best condition.
3. Know What You Want. When you head out shopping during a rapidly changing market, be sure you know what you want in advance. If there is a large inventory of homes for sale, good guidelines can help your agent avoid wasting your time with many homes that don't fit your bill. And if you are competing with investors or working with banks, you'll need to be decisive and act fast. There may be no time for lengthy deliberation.
4. Get Approved. As mentioned, speed is often an issue with recession real estate markets. So, get prepared ahead of time and arrive with your mortgage approval in hand. After the last recession, many lenders tightened up their approval standards, so you may need to do extra paperwork or documentation that calls for more time and effort. The earlier you get started, the sooner you'll be ready to make a snap offer.
5. Choose a Good Agent. Your real estate agent is key to a smooth shopping and buying process. Meet with potential agents and perform your own sort of 'interview'. During this vetting process, look for knowledge of the area in which you're buying and a good system in place for finding and showing the right homes. Also, discern whether you feel comfortable with the agent on a personal level — with how he or she interacts with you, communicates with you, and treats you. A good fit will make everything work better.
By planning ahead before a recession hits, you'll be able to shop for real estate confidently and find a home for sale that you will enjoy no matter what the economy looks like.
Once you sign the sale contract with your listing agent, there's a good chance that things will start moving quickly. Your agent will want you to stage your home for the listing photos, open houses, and showings. If you've never experienced the staging process, you may not know exactly what to do or where to start. The information on this site will help you to not only understand what's expected of staging but also offer tips for you to maximize your efforts without investing a lot of time. I hope the information here makes your home sale process a little bit less confusing and a little easier to manage.