If you’re getting ready to buy your first home, you’re likely focused on saving up for everything that purchase involves. One cost that’s likely top of mind is your down payment. But don't let a common misconception about how much you need to save make the process harder than it could be.

Understand 20% Isn’t Always the Typical Down Payment

Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Unless specified by your loan type or lender, it’s typically not required to put 20% down. This means you could be closer to your homebuying dream than you realize. According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, the median down payment today is only 14%. And it’s even lower for first-time homebuyers at just 6% (see graph below):

Learn About Options That Can Help You Toward Your Goal

If saving for a down payment still feels like a challenge, know that there’s help available. A real estate professional and trusted lender can show you options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from Down Payment Resource, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

Plus there are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

To understand your options, be sure to do your homework. If you’re interested in learning more about down payment assistance programs, information is available through sites like Down Payment Resource. Then, partner with a trusted lender to learn what you qualify for on your homebuying journey.

Bottom Line

Remember, a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your down payment options.

If buying or selling a home is part of your dreams for 2023, it’s essential for you to understand today’s housing market, define your goals, and work with industry experts to bring your homeownership vision for the new year into focus.

In the last year, high inflation had a big impact on the economy, the housing market, and likely on your wallet too. That’s why it’s critical to have a clear understanding of not just the market today, but also what you want out of it when you buy or sell a home. Danielle Hale, Chief Economist at realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, so that you can stay in your home long enough that buying is a sound financial decision.”

Here are a few questions you can start thinking through as you fine tune your goals for 2023.

1. What’s Motivating You?

You’re dreaming about making a move for a reason – what is it? No matter what’s happening in the market, there are still many compelling reasons to buy a home today. Your needs may have changed in a way your current house can’t address, or you could be ready to step into homeownership for the first time and have a space that’s truly your own. Use what’s motivating you as a guidepost in partnership with an expert advisor to help make sure your move will give you a lasting sense of accomplishment.

2. What Does Your Next Home Look Like?

You know you want to move, but how would you describe your dream home? The available supply of homes for sale has grown, and that could mean more options to choose from when you buy. Just be sure to keep your budget in mind and work with a trusted real estate professional to balance your wants and needs. The better you understand what’s essential and where you can be flexible, the easier it can be to find the home that’s right for you.

3. How Ready Are You To Buy?

Getting clear on your budget and savings is essential before you get too far into the process. Working with a local agent and a lender early is the best way to make sure you’re in a good position to buy. This could include planning how much to save for a down payment, getting pre-approved for a home loan, and assessing your current home equity if your move involves selling your existing house.

A Professional Will Guide You Through Every Step of the Process

Buying or selling a home is a big process that takes expertise to navigate. If that feels a bit overwhelming, you aren’t alone. According to a recent Harris Poll survey, one in five respondents see a lack of information or knowledge about the homebuying process as a barrier from owning a home. Don’t let uncertainty hold you back from your goals this year. A trusted expert can bridge that gap and give you the best advice and information about today’s market.

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Let’s connect to plan how your dreams for 2023 can become a reality.

With higher mortgage rates and moderating buyer demand, conditions in the housing market are different today. And if you’re thinking of selling your house, it’s important to understand how the market has changed and what that means for you. The best way to make sure you’re in the know is to work with a trusted housing market expert.

Here are five reasons working with a professional can ensure you’ll get the most out of your sale.

1. A Real Estate Advisor Is an Expert on Market Trends

Leslie Rouda Smith, 2022 President of the National Association of Realtors (NAR), explains:

"During challenging and changing market conditions, one thing that's calming and constant is the assurance that comes from a Realtor® being in your corner through every step of the home transaction. Consumers can rely on Realtors®' unmatched work ethic, trusted guidance and objectivity to help manage the complexities associated with the home buying and selling process.”

An expert real estate advisor has the latest information about national trends and your local area too. More importantly, they’ll know what all of this means for you so they’ll be able to help you make a decision based on trustworthy, data-bound information.

2. A Local Professional Knows How To Set the Right Price for Your House

Home price appreciation has moderated this year. If you sell your house on your own, you may be more likely to overshoot your asking price because you’re not as aware of where prices are today. If you do, you run the risk of deterring buyers or seeing your house sit on the market for longer.

Real estate professionals provide an unbiased eye when they help you determine a price for your house. They’ll use a variety of factors, like the condition of your home and any upgrades you’ve made, and compare your house to recently sold homes in your area to find the best price for today’s market. These steps are key to making sure it’s set to move as quickly as possible.

3. A Real Estate Advisor Helps Maximize Your Pool of Buyers

Since buyer demand has cooled this year, you'll want to do what you can to help bring in more buyers. Real estate professionals have a large variety of tools at their disposal, such as social media followers, agency resources, and the Multiple Listing Service (MLS) to ensure your house gets in front of people looking to make a purchase. Investopedia explains why it’s risky to sell on your own without the network an agent provides:

“You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home.”

Without access to the tools and your agent’s marketing expertise, your buyer pool – and your home’s selling potential – is limited.

4. A Real Estate Expert Will Read – and Understand – the Fine Print

Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. NAR explains it like this:

“Selling a home typically requires a variety of forms, reports, disclosures, and other legal and financial documents. . . . Also, there’s a lot of jargon involved in a real estate transaction; you want to work with a professional who can speak the language.”

A real estate professional knows exactly what all the fine print means and how to work through it efficiently. They’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.

5. A Trusted Advisor Is a Skilled Negotiator

In today’s market, buyers are also regaining some negotiation power as bidding wars ease. If you sell without a professional, you’ll also be responsible for any back-and-forth. That means you’ll have to coordinate with:

• The buyer, who wants the best deal possible
• The buyer’s agent, who will use their expertise to advocate for the buyer
• The inspection company, which works for the buyer and will almost always find concerns with the house
• The appraiser, who assesses the property’s value to protect the lender

Instead of going toe-to-toe with all the above parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.

Bottom Line

Don’t go at it alone. If you’re planning to sell your house this winter, let’s connect so you have an expert by your side to guide you in today’s market.

If you’re thinking about buying or selling a home, you probably want to know what’s really happening with home prices, mortgage rates, housing supply, and more. That’s not an easy task considering how sensationalized headlines are today. Jay Thompson, Real Estate Industry Consultant, explains:

“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”

Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty in the market. As Jason Lewris, Cofounder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

But it doesn’t have to be that way. Buying or selling a home is a big decision, and it should be one you feel confident making. To help you separate fact from fiction and get the answers you need, lean on a local real estate advisor.

A trusted expert is your best resource to understand what’s happening at the national and local levels. They’ll be able to debunk the headlines using data you can trust. And using their in-depth knowledge of the industry, they’ll provide context so you know how current trends compare to the normal ebbs and flows in the industry, historical data and more.

Then, to make sure you have the full picture, they’ll tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you’ll use all of that information to make the best possible decision for you.

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where an agent comes in.

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If you have questions about the headlines or what’s happening in the housing market today, let’s connect so you have expert insights and advice on your side.

Are you prepping to buy your first home? If so, one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are just a few of the financial fundamentals you’ll need to focus on as you set out to buy a home.

Build Your Credit

Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:

• Tracking your credit and disputing any errors that show up on your reports.
• Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
• Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

Automate Your Savings for Your House Fund

You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:

“One of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”

Get Pre-Approved

As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the pre-approval process comes in.

Pre-approval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings, can help you decide on your target price range for a house.

From there, you can start browsing for houses online and see what’s available in your area in that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals

Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals. Having expert advisors in the industry will help you make strong decisions throughout the homebuying process based on your specific goals, finances, and situation. They know the market and can guide you toward the home of your dreams.

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If you’re ready to get the homebuying process started, let’s connect so you can begin to build your team of professionals today.