1. Do not purchase a home as an investment.

Your home’s value is likely to fall before the end of the year, and possibly next year. You may owe more on the house than it is worth, especially if you put down a small amount. Initially, it will be more like a liability than an investment. The home’s value will eventually recover. You should be fine if you plan to stay in the house for at least 5-6 years. However, if you plan to live in your next home for just a few years, renting may be a better option.

2. Don’t Use an Adjustable-Rate Mortgage

Using an Adjustable-Rate Mortgage may appear to be a good idea, but when your initial interest rate changes, it may rise significantly. Your lender will most likely inform you that you can refinance the loan. Yes and no. It depends on how much equity you have built up, and chances are it won’t be enough if you buy your home at the peak of the market and then prices begin to fall. You won’t be able to refinance the loan if you don’t have a sufficient amount of equity in your home, and you’ll be stuck with a very high monthly payment as a result. If this happens, you might be forced to sell your home at a loss, or even worse, the bank might foreclose on the property and take it back. That scenario may be tragic.

3. Do not make an offer on a newly listed home.

Sellers and real estate agents are looking at comparable properties that may have gone under contract just before the market shift. Those prices were negotiated in a seller’s market, which no longer exists. Furthermore, those buyers may have had a lower interest rate on their mortgage, making the home more affordable in terms of monthly payments. Prices are decreasing. If the sellers do not receive an offer right away, they will sooner or later reduce the price or offer some kind of concessions towards the buyers’ closing costs. Wait for a better deal and be patient. There will be many more houses on the market from which to choose.

4. Don’t make an emotional decision; instead, follow the advice of your real estate advisor.

Purchasing a home, particularly your first home, is an emotional experience. You may have been saving for a long time and have a vision of the ideal home. When you find the perfect home, don’t rush into paying full price or offering better terms for the sellers. Allow your agent to create a buying strategy that will get you the best deal possible. That means you may have to wait a little longer or ask for a lot more. Start at a low offer price and see if you can gradually meet your sellers’ needs. Take your time. It’s okay if you lose that house; there will be others. And, while you wait, prices will continue to fall.

5. Do not engage in a bidding war.

Have you been looking for a home only to discover that your offer was rejected? That was the case for the majority of home buyers in early 2022 and 2021. You needed to be aggressive and write an appealing offer to the sellers; offer a price that is higher than the asking price and pay for closing costs, as well as waive contingencies. This is NOT the case any longer. Finally, you are not under pressure to make a decision quickly. Offer no more than the house is worth or even below! The economy is deteriorating by the day. Owning more than the property is worth can have devastating consequences for your financial and family.

6. Don’t change your financial circumstances before closing.

We don’t know whether mortgage rates will rise or fall. If they continue to rise, you will be unable to qualify for the same loan amount for which you are currently pre-approved. Even if rates remain unchanged, affordability is a major issue in the market today. Your final approval may be jeopardized if your credit score falls in case you open new credit accounts and make large purchases, or you make late payments on your accounts. Take extra care of your financial situation. If you can, improve it, but don’t let an impulse purchase or a late payment endanger your ability to obtain a loan.

7. Do not quit or change jobs.

It is critical to understand that a mortgage pre-approval does not imply final approval. The closing process could take 30-40 days. On the day of closing, you must provide proof of employment.. The lender will double-check all of your assets, credit score, and employment to ensure that you can make your future payments.

I hope this information helps you understand what is going on in the real estate market right now. You have the upper hand as the buyer. If you’re thinking about buying or selling this year, I’d like to see if we can collaborate. Everyone has different requirements. I’d like to meet with you to discuss your situation, answer any questions you have about buying or selling in this market, and tailor a solution just for you. My approach to working with buyers and sellers is to educate them and guide them through the process so that they can make an informed decision.

Please consider subscribing to my channel. I will keep buyers and sellers informed of market changes as they occur. My advice may evolve over time. I wish I had a crystal ball and could predict the future, but I don’t. So stay tuned and learn alongside me. Give this video a thumbs up, leave your comments or questions in the comments section, and share it with anyone you think might be looking to buy or sell a home. Check out these videos next.