Tips for navigating an insane Columbus home market.
It’s finally here. Green has returned to our world, 45 degrees feels like sandal weather, and there’s a chance you may actually feel like interacting with the world after 6 p.m. What is that bright glowing orb in the sky? Oh right, the SUN.
Springtime in Columbus also means real estate signs as ubiquitous as orange construction barrels. According to the National Association of Realtors, approximately 40 percent of the year’s sales take place March through June. You heard the stories last spring: someone got a tip on a home about to be listed, only to find an hour later that it’d been already sold.
Intense, right? Well, you ain’t seen nothing yet.
Columbus is currently in a home real estate shortage. Sure, you’ll soon be able to score an overpriced Short North condo above White Castle with surprising ease (did anyone ask for that, by the way?), but a single family home will be harder to find. In fact, at the time of writing, Central Ohio housing inventory was 12 percent lower than the previous month and 21 percent lower year over year. This leaves Columbus with little more than one month’s inventory, as compared to a balanced market supply of 6.5 months. Not only does this make finding a home more challenging, but low inventory means that sellers typically field multiple offers, driving up the home’s price. As Margaret Lipp of RE/MAX Premier Choice, The Schirtzinger Group cautions, this environment puts a huge burden on buyers in more ways than one:
But, not to worry. Lipp has some common-sense tips for those of us who are more comfortable admiring a kitchen backsplash (Ooh! Subway tile!) than #adulting.
First, make sure you have the right partner by your side. Experienced and trustworthy real estate agents and lenders can mean the difference between a dream come true, and lifelong regret. “Home buying is full of unexpected and constant decision-making,” emphasized Lipp. “Whether it’s your first home, or third, no home buying scenario is the same. It’s critical to work with a professional who has your best interest at heart.” She recommends getting references from friends and family. Then, request a meet and greet with agents and lenders who seem promising. This ensures you’ll enjoy working together and feel confident in their guidance.
Next, prepare your finances. It’s exciting to jump immediately into home viewings, but that’s getting ahead of yourself. There are many upfront costs related with purchasing a home. Depending on the type of loan you have, it may require a down payment of up to 20 percent of the purchase price. There’s also closing costs, which are essentially loan purchase fees, totaling up to 5 percent of the purchase price. Finally, home inspections average $550. And of course, once you sign on the dotted line you’ll have moving expenses, furniture purchases, repair or remodeling investments, etc. The takeaway? Lipp advises, “be realistic with what you can afford — it sounds simple, but becoming house poor is easy when your eyes are bigger than your wallet.”
Keep an open mind. It’s natural to have your heart set on a neighborhood or style of home. “If you love the vibe of Clintonville, but would rather not compete with offers that tend to be $10-$15,000 over list price, consider up-and-coming neighborhoods with a similar feel, like Westgate.” Lipp adds that a good agent should be able to educate buyers on market trends for neighborhoods and advise as to whether the house will appreciate over time, hold its value, or if you stand to lose money down the road. “Having to pay over list price in some Columbus neighborhoods is the new normal right now, so it’s important to have perspective.”
And perspective is everything. Some homes require a keen eye to see the potential, or maybe it’s simply a fresh coat of paint. When evaluating a home’s condition, inside or out, it’s smart to consider what it would take to get it within range of your ideal. It might not be far off. That said, beware the lure of a fixer upper. It’s tempting to fancy yourself the next Chip and Jo, but that life isn’t for everyone. A handy friend who knows their way around a home project can be a blessing, but full-on remodeling can be a massive commitment of time and money, not to mention sanity. It’s important to recognize if you’re up to it.
Finally, be patient and take. your. time. In this competitive market the harsh reality is you’re probably going to lose out on five or more houses before buying. Bidding wars have a way of taking on a life of their own – which is why sometimes, it’s best to just let the house go. A smart agent will advise you when to dig in, and when to walk away. And even when a seller accepts your offer, there are still other hurdles to clear, including the home inspection and appraisal. All said and done, it could be over six months before you find a home and close on it.
Most importantly, stay positive! You WILL find your home, and with the right agent, you won’t be on the journey alone. So, go forth! Critique those backsplashes, and before you know it, you’ll be a homeowner.