Looking to buy a home this season? Here’s what you should know. 

Buyers have more leverage today than they’ve had in years. There are more homes to choose from and, in many areas, sellers are more open to negotiation. 

But that doesn’t mean competition is gone completely. These days, it varies a lot depending on where you’re hoping to move. 

If you’re buying in a popular neighborhood, or in a market where there aren’t many homes for sale, you may still find yourself competing with another buyer.

And that’s especially true in the Spring. Here’s how to stay one step ahead of any competition this season.

Why Your Best Offer Still Matters This Spring

According to experts at Zillow and Realtor.com, Spring is one of the busiest times of year to buy a home.

That’s because many buyers want to move now so they can settle in before the next school year. And when more buyers enter the market, competition naturally picks up. 

So, depending on where you’re buying, you may still need to move quickly and make a strong offer, even though the market overall has moderated. And that’s especially true if you find a home you really love.

This is what you need to know to make your offer stand out.

1. Lead with a Strong, Realistic Offer

It’s tempting to start low and negotiate up. And in some markets, that strategy can work. But if a home is priced well and getting attention, lowballing could hurt your chances.

Instead, focus on making an offer that reflects your local market. As Bankrate explains:

“There is no magic formula for an optimal home offer. Any offer will be heavily dependent on asking price and local market conditions . . . Your real estate agent will know the local market well and can advise what a competitive — but fair — offer will look like in your area.”

The goal is to make an offer that makes sense for you and stands out to the seller.  

2. Have a Plan for Competing Offers

If you’ve fallen in love with a home, it’s important to have a plan in case there’s competition from another buyer. One strategy your agent may discuss with you is an escalation clause, which Investopedia explains like this:  

“An escalation clause is a way to automatically escalate your bid by a certain dollar amount, up to a certain ceiling, to compete with other bids.”

The key is knowing your budget and sticking to it. You don’t want to lose out over a small difference – and this can help prevent that. But you also don’t want to overpay.

Keep in mind that if the appraisal comes in lower than your offer, you may have to make up the difference out of pocket. Your agent can help you weigh those risks and determine the best approach for your situation.

3. Keep Your Offer Clean

Price matters. But sellers also look closely at your offer’s terms. In some cases, a simpler, cleaner offer can stand out – even if it’s not the highest. As Redfin says:

“Sellers tend to want clean, straightforward offers with minimal strings attached. Keep your requests simple and focus on the essentials.”

Your agent can help you prioritize what matters most, so you’re not giving up things you need, while still making your offer as appealing as possible.

4. Be Flexible Where You Can

Sometimes, what helps your offer the most is understanding what matters to the seller. NerdWallet explains:

“As you prepare an offer, you tend to focus on what the seller has (a house) and what you want (their house). But you’ll gain a competitive edge by viewing the transaction from the seller’s eyes: What does the seller want?”

Does the seller need extra time to move out? Or do they want to move as soon as possible? Your agent can talk with the seller’s agent to find out what matters most. Flexibility here can make a big difference in how your offer is received.

Bottom Line

Today’s market may be balancing out, but strong offers still matter – especially during the busy Spring season.

Working with a local agent can help you understand your market and put together an offer that stands out when it matters most.

According to Google Trends, online searches for down payment information recently hit an all-time high. And that’s a clear sign more buyers are trying to figure out what they really need to save before making a move (see graph below):

If you’re wondering the same thing, you can always turn to the internet for answers. But a lot of the time, it’s better to ask a local expert. Because here’s what a pro would tell you.

The 20% Down Payment Myth

The idea that you need 20% down to buy a home is one of the biggest misconceptions around the homebuying process. And the data debunks the myth.

While there are benefits to putting that much money down, most first-time buyers put down far less.

Here’s why. Unless it’s stated by your lender, you typically don’t have to have a 20% down payment. There are even some loan options designed to help you get into a home with a much smaller upfront cost. As the Mortgage Reports explains:

“The amount you need to put down will depend on a variety of factors, including the loan type and your financial goals. If you don’t have a large down payment saved up, don’t worry—there are plenty of options available, and you don’t need to put down the traditional 20% . . . many homebuyers are able to secure a home with as little as 3% or even no down payment at all . . .”

For example, FHA loans allow down payments as low as 3.5%, while VA and USDA loans offer zero down payment options for qualified applicants, like Veterans.

And those options are just one reason so many first-time buyers are able to buy without a 20% down payment.

What Buyers Are Actually Putting Down

So, if buyers aren’t doing 20%, how much do they actually put down?

According to the National Association of Realtors (NAR), the median down payment for first-time homebuyers is only 10%. That’s half of what you probably expected.

That means if you’re aiming to save 20% because you think you have to, you may be setting a timeline that’s longer than necessary.  

And here’s some more good news. It’s not only that you may be able to buy with less money down than you thought, but there are also options to help you get to your down payment goal even faster.

Why You Should Look into Down Payment Assistance Programs

There are a lot of programs designed to help you save for a down payment – and they can make a big difference in how fast you hit your savings target. Unfortunately, buyers don’t realize how many there are, or that they may qualify for help.

Research from Realtor.com shows almost 80% of first-time homebuyers qualify for down payment assistance (DPA), but only 13% actually use it (see chart below): 

And that’s another big miss holding would-be buyers like you back.

In the U.S., there are over 2,600 homeownership programs available, many offering significant financial support. As Down Payment Resource shares:

“With an average benefit of $18,000, down payment assistance (DPA) remains one of the most essential tools for addressing the nation’s affordability challenges. Programs continue to expand in scope, serving a broader range of incomes, property types and borrower needs, including first-generation, military and repeat buyers.”

Imagine how much further your savings could go with an extra $18,000 you can use to buy. In some cases, you may even be able to stack multiple programs, giving what you’ve saved an even bigger boost.

Bottom Line

The simple truth is: most first-time buyers don’t put 20% down. And if you’ve been waiting to buy until you have that saved, you may be setting a timeline that’s longer than necessary.

To find out what you really need to save and if you qualify for any help, connect with a trusted lender who can walk you through your options. You may be able to buy sooner than you thought.

There’s a lot of uncertainty right now and that’s leading to some dramatic headlines. And if you’re thinking about buying a home, that can make you feel a little less sure about your decision.

A recent study by CNBC asked homebuyers what they’re most worried about, and three themes kept coming up again and again:

• Mortgage rates
• The number of homes for sale
• Home prices

But a lot of what you may be hearing on those is based more on misconceptions. Not facts. So, let’s break it down and separate fact from fiction.

Misconception #1: “I’ll Just Wait, Because Mortgage Rates Are Going To Fall Dramatically”

One idea doing its rounds on social is that mortgage rates are going to drop dramatically soon. So, it’s better to wait to buy.

But is that really what’s expected?

While mortgage rates have come down a bit in the last few weeks, forecasts don’t show a major drop ahead. The most likely scenario is that rates stay somewhere in the low 6% range this year. 

And that’s not a big change from where rates are now (see graph below): 

Of course, this depends on where inflation and the economy go from here. But, based on what we know today, waiting for a big drop in rates may not work out the way some people hope. As U.S. News explains:

“Mortgage rates aren’t expected to change much over the next several quarters . . .”

Not to mention, even with rates where they are today, it’s already more affordable than a year ago. So, even if they don’t change much, it’s still better than it was.

Misconception #2: “There Are Too Many Homes for Sale Right Now”

You’ve probably heard inventory is up. And nationally, it is. The number of homes for sale is 8% higher than this time last year. But that’s not a bad thing. In fact, it’s one of the reasons buyers have a bit more breathing room right now.

The problem is the headlines are making something good, sound bad. They’re focusing on how this is the most inventory we’ve had since 2019 or how many homes builders are building. And that can make it sound like the number of homes for sale is rising too far, too fast.

But that’s not what the bigger picture shows.

Data from Realtor.com proves that, even though inventory is up compared to last year, it’s still nearly 14% lower than it was during the last normal housing market (2017-2019):

While it can vary a lot based on where you live, only 9 states have more inventory than pre-pandemic today. That’s a key reason why there still aren’t enough homes for sale to trigger something like the crash back in 2008.

Misconception #3: “Home Prices Are About To Crash”

You’ve probably seen this one, too. The confusion is coming from the fact that some metros are experiencing slight price declines. And influencers are running with that and saying prices are crashing. But that’s not the reality.

Most areas are seeing prices rise, not fall. And that’s because:

• Many homeowners aren’t selling because they don’t want to give up the low mortgage rate they locked in a few years ago. And that’s keeping a lid on how much inventory can grow.
• Since inventory is still below pre-pandemic norms, there aren’t enough homes for sale to cause a price crash.
• And even in markets with more inventory, some sellers are choosing to pull their homes off the market instead of cutting prices.

And those are 3 big reasons prices aren’t headed for a crash. 

And even in the markets experiencing mild declines, the drops aren’t enough to cancel out the big gains most homeowners have seen in the last 5 years (see graph below):

That’s not a crash. That’s just prices moderating after a few record-breaking years.

Bottom Line

Online posts are going to make things sound worse than they are. If you want a true, data-bound look at what’s really happening in today’s market, lean on a real estate agent.

Connect with a local agent so you have someone to separate fact from fiction today.