There’s an implicit notion that consumers always know what they’re doing. After all, if you walked into a grocery store, you would have no issue finding the product you want, price comparing against similar products and flagging a staff member for help in case you have questions. But consumerism isn’t always a one-size-fits-all process, nor is it always direct and uncomplicated. Case in point: buying real estate.
It’s okay to not know what you’re doing with real estate. Especially if you’re a first-time buyer – or haven’t bought in many years – there’s a lot to know. Much has changed in real estate over the past decade as technology and consumer habits evolve.
In this article, let’s get you up to speed by covering three essential topics: knowledge, technology and money.
There’s No Homogeneous Market
Let’s start with knowledge. Perhaps it’s obvious, but this bears repeating: there is no homogenous housing “market” (despite what the title of this article says). Instead, you will find a patchwork of diverse markets influenced by geography, demographics, median incomes and a bevy of other factors (like foreign ownership, migration patterns, etc.). Every city is different. And within cities, every neighbourhood is its own ecosystem.
The first thing to understand is that knowledge takes dedicated research from authoritative sources. Find a real estate platform online that will tell you the average price trend, listing trends and average “days on market” to illustrate a “market conditions indicator” for your area. These insights will tell you whether you’re in a seller’s market, buyer’s market or balanced market.
Real Estate Technology Has Made Fantastic, Consumer-Centric Strides
If you haven’t bought a home in a decade, it may surprise you to learn that the process is actually a lot easier now in many ways. This is thanks to real estate technology – technological innovations that streamline the buying process, elevate consumers and turn real estate into a democratic, transparent marketplace.
A great example is Nobul, a real estate digital marketplace where buyers can shop around for the right realtor. On Nobul, you can input criteria (sales history, services, minimum verified reviews, etc.) and find a realtor who aligns with your values/needs. As Nobul owner and CEO Regan McGee points out to Superb Crew, “Prospective homebuyers are… looking for a competitive advantage in finding their dream homes – finding the right agent is an essential part of that.”
Mortgage Approval Is Still a Multi-Step Process
Lastly, let’s address the elephant in the room: money. As it has been for decades, mortgage approval is a multi-step process (in fact, it probably has more steps today).
If you’re a first-time homebuyer, you will want to begin with mortgage “pre-qualification,” an informal self-assessment that gives lenders a rough idea of your fitness for debt repayment. It’s important to note that pre-qualification doesn’t (or shouldn’t) hold water in contract negotiations; it’s a stepping stone that will help you to the next step, “pre-approval.”
Pre-approval is where the bank gets serious about your mortgage, pulling documents like tax returns, proof of employment, current debts and financial obligations, credit rating, etc. Banks use this information to estimate your mortgage payments, generate a rate and lock in that rate for 60 to 130 days. This pre-approval will prove invaluable as you start making bids.
To be competitive in today’s market, you must leverage knowledge, money and technology. Find the right realtor for you, use a real estate digital platform to research insights on your area and follow the due process of mortgage approval.