Homebuyers today are faced with a strong sellers’ market…a lot of active buyers competing for a relatively low number of available homes. As a result, it’s essential to understand how to make a confident and competitive offer on your new home. Here are some tips for success in this stage of the homebuying process.

Listen to Your Real Estate Advisor

Trusted professionals can help you stay focused on the most important things, especially at times when this process can get emotional for buyers. Remember to let your homebuying team, not your emotions, guide you on your journey. Their support and expertise will keep you from compromising on your must-haves and future financial stability.

Understand Your Finances

Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to get pre-approved for a loan early in the homebuying process. Doing so makes it clear to sellers you’re a serious and qualified buyer, and it can give you a competitive edge in a bidding war.

Be Prepared to Move Quickly

According to the National Association of Realtors (NAR), the average property sold today receives 3.7 offers and is on the market for just 21 days. These are both results of today’s competitive market, showing how important it is to stay agile and alert in your search. As soon as you find the right home for your needs, be prepared to submit an offer as quickly as possible.

Make a Fair Offer

It’s only natural to want the best deal you can get on a home. However, submitting an offer that’s too low can lead sellers to doubt how serious you are as a buyer. Don’t make an offer that will be tossed out as soon as it’s received. The expertise your agent brings to this part of the process will help you stay competitive

Stay Flexible in Negotiations

After submitting an offer, the seller may accept it, reject it, or counter it with their own changes. In a competitive market, it’s important to stay nimble throughout the negotiation process. You can strengthen your position with an offer that includes flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized).

Whenever you’re in the market for a new home, seeing all of these different words can be confusing. Did you think a condo was just an apartment? Are you confused by duplexes and townhouses? Well, you’re not alone. The names of different types of houses and housing units can be confusing. The easiest way to make things clear is to break down each one and compare the differences.

What Is A Condo?

A condo, or condominium, is a building that has many different living areas in it. Each area has its own entrance, even if to a hallway, and its own amenities, such as bathroom and kitchen. It is very similar to an apartment. The difference is that in a condo, you own the area that you live in. While you can rent a condo, in most cases, you will buy it instead. When you do rent a condo, you’re renting the area that one person owns rather than renting from the building owner. Condos aren’t owned by one person, they are owned by the community. They are owned by the tenants collectively. While one person may have purchased it to begin with, contracts ensure equal rights within the community.

What Is A Townhouse?

A townhouse is simply a house that is sandwiched by two other houses. There may be a backyard, but there is no access to the exterior sides of the house. A townhouse can be rented or owned and can even be turned into a duplex. It is simply a style of house instead of a type of housing. However, townhouses and condos can look very similar upon first glancing at them. But townhouses always have two walls covered by other buildings. Whereas condos aren’t about what they look like but rather how they are used. Condos are like apartments while townhouses aren’t associated with apartments.

Differences Between A Condo And A Townhouse

Ownership

When it comes to a condo, you have full ownership of the unit you live in yet share joint ownership of the building. The joint ownership is shared with the other tenants rather than a landlord. But the ownership doesn’t end with the building. You also own part of the gym, pool, and any other amenities involved. You even own part of the hallway, yard, and airspace. This is your property, similar to the way that a married couple may share a property. When it comes to townhouse ownership though, it is usually just one family involved. Whoever bought the townhouse owns it. The ownership works just like any other type of home, you even own the small piece of land it sits on.

HOA

HOA, the homeowners’ association, will become an everyday name if you live in a condo. Both of these options have an HOA. The rules of the condo and townhouse are often set by the HOA. But the terms are different. In a condo, the people of the HOA own part of the building. They take care of the common areas and maintenance. They can collect fees among other things. In a way, the HOA is more strict in a condo. In a townhouse, there is a line. You own the property. There may be an HOA that makes rules since the walls of your home are attached to other homes but they don’t have as much power.

Cost

Cost is always a factor, whether you’re building a house or buying. Both condos and townhouses tend to be cheaper than houses that are detached. But when it comes to a condo vs. a townhouse, there is a smaller difference. A condo is usually a bit cheaper because you don’t have to buy any land. Property payments are shared with the other tenants and distributed by HOA. Townhouses on the other hand are handled by you, the homeowner. Contact a realtor to find out the range of condos and townhouses in your area. They can give you an accurate range of what you are looking for to help you compare the two in your area.

Yard

If having your own yard is important, then don’t even consider a condo. You can have a courtyard but it will be shared with other tenants. If you choose a condo, you won’t have any personal outdoor space. When it comes to townhouses, you can have your own backyard and occasionally a small front yard. You may have to follow rules but they shouldn’t be too strict.

In today’s market, you need a real estate agent who can get creative, play hardball in negotiations, and help you stand out from the pack in a bidding war. And not everyone, even an agent recommended to you by a friend or loved one, is up to the task. Want to make sure you’re getting the best real estate agent possible for your home purchase? Then interview at least a few before signing on with one and be sure to ask these questions when you do.

How many other clients are you representing right now?

In today’s high-demand market, this question is critical. You need to know: 1) how many of your potential competitors your agent is representing and 2) how much time and bandwidth they actually have for you and your needs. Choosing a real estate agent who already has 10 buyers and five sellers probably doesn’t bode well for your home search.

Do I have to sign a contract?

You should also find out what the agent’s contract looks like. If you use them and are unhappy with their services, can you switch agents? How long are you locked into their services? In today’s market, this is critical. You don’t want to miss out on record-low mortgage rates just because your real estate agent is not doing the legwork.

What’s your communication style?

You need an agent who jives with your own communication style. If you prefer text or email and your agent is more of a phone or face-to-face kind of person, you’re probably going to find yourself pretty annoyed down the road (and your agent might feel the same). Before getting too far with an agent, always talk about their preferred style of communication, as well as yours. Make sure you’re both on the same page from the start.

In today’s market, the right agent can mean the difference between finding a home and sitting on the sidelines, so choose carefully. Do your research, ask questions, and check reviews and references. Putting in the time now will more than pay off in the long run.

The choice to purchase a new home is a major decision for anyone. Once you’ve settled that you do want to buy a home, there are many more options you’ll have to face; one of the most important is the ideal size of a home to best fit your family and lifestyle. Here are some tips so that you can choose the right size home to meet your needs:

Bigger Isn’t Always Better

You may initially start your home search thinking that size doesn’t really matter. As long as it seems big enough to live in, you don’t care how large it actually ends up being. The truth is that bigger isn’t always better. A large home requires more money—and time—to maintain. Unless you’re using the space, you could just end up wasting your money on maintaining a big house for no reason.

Budget For Maintenance

A crucial aspect of your home purchase decision is to determine what your budget is going to be for home maintenance. A bigger home requires more time and money to take care of, particularly if you’re looking at homes with substantial front and backyards. As for the interior, there are cleaning, repair and energy costs for heating and cooling. Discuss your budget with your partner and your real estate agent to decide the square footage you can realistically handle.

Look At All Sizes

Once you get an idea of the size range that will fit your needs, it’s time to take some tours. Search for homes that are in the appropriate size range that you determined. This isn’t so much about evaluating potential purchases as it is about determining if that size range will fit what you have in mind. Home tours will give you a better idea of what you want the square footage of your home to be and how you want those square feet distributed throughout the bedrooms, common areas and exterior.

Narrowing down the ideal size of home for your needs will dramatically help in your search. There are of course several other factors to consider when purchasing your next home, but next to price and location, size is right up there among the most important.

The housing market boom during the first part of 2021 has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, and the current market conditions are truly making this an ideal time to make a move. Here are some of the biggest wins for Maui homebuyers this season.

Historically Low Rates

In 2020, mortgage rates hit all-time lows 16 times. Continued low rates have set buyers up for significant long-term gains. Essentially, it’s less expensive to borrow money for a home loan today than it has been in years past. Although mortgage rates are expected to remain relatively low in 2021, even the slightest increase can make a big difference in your payments over the lifetime of a home loan. So, this is a huge opportunity to capitalize on right now before mortgage rates start to rise.

Home Equity Is On The Rise

According to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are owned free and clear. In addition, CoreLogic notes the average equity homeowners gained since last year is $17,000. That’s a tremendous amount of forced savings for homeowners, and an opportunity to use this increasing equity to make a move into a home that fits your changing needs this season.

Home’s Are Appreciating

According to leading experts, home prices are forecasted to continue appreciating. Today, many experts are projecting more moderate home price growth than last year, but still moving in an upward direction through 2021. Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home before prices rise even higher is a strong long-term investment.

Supply Is Down

With today’s low inventory of homes on the market, which is contributing to this home price appreciation, sellers are in the driver’s seat. The competition is high among buyers, so homes are selling quickly. Making a move while so many buyers are looking for homes to purchase may mean your house rises to the top of the buyer pool. Selling your Maui house before more listings come to the market in the traditionally busy spring market might be your best chance to shine.

Second home, investment property, vacation home, rental property…..Is there any real difference among them?

There are actually some very big differences between second homes and investment properties, especially if you are obtaining financing for one.

Second Home

A second home is just that: a second property where you and your family spend time, away from your primary home. You might also hear a second home referred to as a vacation property. You may rent it out for a few days each year, but you primarily use it yourself. Buying a second home makes financial sense if there’s one particular vacation spot you visit regularly. Why spend a fortune on hotels when you can own property that will hopefully appreciate in value over time?

Investment Property

An investment property, on the other hand, is one that you purchase with the explicit intention of generating income. The investment property could be right next door to your own home, or it could be in another state—it doesn’t really matter. You’ll be playing the role of landlord, with long-term or short-term renters paying cash to stay in the home. Before making an offer on an investment property, you’ll want to crunch the numbers to make sure it’s a solid investment. Similarly, consider what factors will be important to prospective tenants…access to public transportation, good schools, parking, and low crime rates.

Why it’s important to not confuse the two

It’s important that you’re totally clear about the difference and not use the terms “second home” and “investment property” interchangeably. Some people try to pass off their investment property as a second home to get more favorable financing, but you should never do this. If you lie on your loan application, you could be committing mortgage fraud, which is a federal offense.

Your lender’s underwriting team is aware of this possibility, so don’t try to pull the wool over their eyes. A single-family residence by a lake that is located in a completely different state from the borrower’s primary residence is much more acceptable to be categorized as a second home by a bank underwriter. A multifamily-unit property with rental income in an urban area is likely to be treated as an investment property.

A buyer’s market is when there are more properties for sale than prospective buyers, and sellers are more willing to go with a low bid. However, that doesn’t mean you can’t buy a new home in a seller’s market, when there are more buyers than homes, and sellers can afford to hold out for higher offers. Here are some things to think about when home shopping in a seller’s market.

Search Early

Buying a house in a seller’s market requires diligence, which means you need to start researching even before you attend open houses. Since homes in Maui are priced to sell, you need to know what you want, how much you can spend and what things aren’t negotiable. Make the most of your time by obtaining information about the house you’re interested in. Look for any disclosures on the property, property reports and how long you have to make an offer. If you’re not sure where to start, Maui real estate professionals can help you. Real estate professionals can help you locate different homes that suit both your style and budget. They can also help you with the process of making an offer. The key is providing as much detailed information as possible prior to getting started.

Quality Purchase Offer

After you have found a home you’re interested in, it’s time to put in your offer. Make sure to research what homes in the same area have sold for prior to making an offer. You should also ask if the seller is offering concessions. Concessions are extras that some sellers offer to offset the selling price. However, try not to request concessions at first. If the seller is working with a real estate agent, they’ll already have that information. If you’re working with an agent, they can fill you in prior to meeting with the seller.

Prequalify

You should get prequalified before touring homes. The last thing you want is to find your dream home but not able to secure a mortgage. Being prequalified will help you better narrow your search and exclude any homes that are out of your price range. It also shows the seller that you’re serious about buying.

Escalation Clause

Escalation clauses state that you’ll pay a certain amount above the highest bid up to the maximum offer. It’s important to know that some sellers may make a counteroffer to your escalation as well. This means they may actually increase the listing price and ask for more money. While choosing to accept the offer is up to you, it’s always better to sleep on it and, if necessary, contact a real estate attorney for further advice.