Today’s market has high buyer interest and low inventory. With so many buyers competing for a limited number of homes, it’s more important than ever to know how to submit a confident and competitive offer. Here are a few tips for this important stage in the homebuying process.

Trust Your Real Estate Agent

Making an offer on a home in today’s market can become emotional for buyers, that’s why trusted professionals can help you stay focused on the most important things. Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability. Your Maui real estate professional should be your primary source for answers to the questions you have when you’re ready to make an offer.

Have Your Finances In Order

Having a complete understanding of your budget and how much house you can afford is essential. The best way to know this is to reach out to your lender to get pre-approved for a loan early in the homebuying process. It shows sellers you’re a serious, qualified buyer and can give you a competitive edge if you enter a bidding war.

Take Action Quickly

The average property being sold today is receiving multiple offers and is only on the market for a few weeks. These are both results of today’s competitive market, showing how important it is to stay agile and vigilant in your search. As soon as you find the right home for your needs, be prepared to work with your agent to submit an offer as quickly as possible.

Don’t Try To Low Ball

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 submit 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.

Be Flexible

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. Your position can be strengthened 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).

With today’s low mortgage rates, there’s great opportunity for current Maui renters to make a move into homeownership that stretches each dollar a little bit further. While the best timeline to buy a home is different for everyone, the question remains: Should I continue renting or is it time for me to buy? The answer depends on your current situation and your future plans, so here are some thoughts to help you decide if you’re ready to own a home of your own.

Rents Are Increasing

According to the U.S. Census Bureau, median rent continues to rise. This is one of the top reasons why renters decide to move, because in most cases, rent will continue increasing each year. When you own a home, you’ll lock in your monthly payment for the life of your loan, creating consistency and predictability in your payments.

Freedom to Personalize

This is a big decision making point for many people who want to be able to paint, renovate, and make home upgrades. In many cases, landlords determine all of these selections and prefer you do not alter them as a renter. As a homeowner, you have the freedom to decorate and personalize your home to truly make it your own.

Privacy

When renting, your landlord has access to your space in case of an emergency. If you own your home, however, you’re the one to decide who can come inside. Given today’s health concerns around the pandemic, this may be a growing priority for you.

Flexibility

If you’re renting in Maui, it may be easier to move quickly should you have a job transfer or simply decide it’s time for a change. When you’re a homeowner and need to sell your house, this might take a little more time. Today, however, with the housing market’s low inventory, this may no longer be the case. Homes are selling at a record-breaking pace, so you may have more flexibility than you think.

Equity Building

When you pay your rent, your landlord earns the equity the property gains. If you own your home, the benefits of your investment go directly toward your net worth. This is savings you’ll be able to use in the future for things like sending children to college, starting a new business, buying a bigger home, or simply downsizing to save for retirement.

Tax Advantages

When you own your home, there are additional advantages that work in your favor as well. You can deduct things like your property taxes and mortgage interest (Always make sure you check with your accountant to see which tax-deductible benefits apply to your situation). When you rent, however, the tax benefits are directed to your landlord.

With so few houses for sale today and low mortgage rates driving buyer activity, bidding wars are becoming more common. Multiple-offer scenarios are heating up, so it’s important to get pre-approved before you start your search. This way, you can put your best foot forward – quickly and efficiently – if you’re planning to buy a home in Maui.

Get Prepared

A recent survey shows that only 52% of active homebuyers obtained a pre-approval letter before they began their home search. That means about half of active buyers missed out on this key part of the process. Buyers who are pre-approved are definitely a step ahead when it’s time to make an offer. Having a pre-approval letter indicating you’re a qualified buyer shows sellers you’re serious. It’s often a deciding factor that can tip the scale in your direction if there’s more than one offer on a home.

Don’t Lowball

In a highly competitive market, it’s common for sellers to pick a date and time to review all offers on a house at one time. If this is the case, you may not have an opportunity to negotiate back and forth with the sellers. As a matter of fact, the National Association of Realtors (NAR) notes: “Not only are properties selling quickly, but they are also getting more offers. On average, REALTORS® reported nearly three offers per sold property in July 2020.” Make sure the offer you’re presenting is the best one the sellers receive.

Be Quick

With existing homes going like hotcakes, there’s no time to waste in the process. NAR reports how the speed of home sales is ramping up: “Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and from 29 days in July 2019. Sixty-eight percent of homes sold in July 2020 were on the market for less than a month.” As you can see, the market is gaining steam. You may not have time to sleep on it or shop around when you find a home you love. Chances are, someone else loves it too. If you take your time, it may not be available when you’re ready to commit.

Finding the perfect Maui home to purchase is one of the biggest challenges for potential buyers. With so few homes for sale and construction of newly built homes ramping up, you may be wondering if you should consider new construction in your search process. It’s a great question to ask, and one to look at from the pros and cons of what it means to buy a new home versus an existing one. Here are a few things to consider when making the best decision for your family.

New Construction in Maui

When buying a new home in Maui, you can often choose more energy-efficient options. New appliances, new windows, a new roof, etc. These can all help lower your energy costs, which can add up to significant savings over time.

Lower maintenance that comes with a newer home is another great benefit. When you have a new home, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. With new construction, you’ll also have warranty options that may cover portions of your investment for the first few years.

Another solid benefit to new construction is customization. Do you want a mudroom, stainless steel appliances, granite countertops, hardwood floors, an office, or a multipurpose room to homeschool your children? These items can be customized to your specific needs during the design phase. With an existing home, you’re buying something that’s already completed, so if you want to make changes, you may need to hire a contractor to perform the work.

Existing Home in Maui

When buying an existing home in Maui, you can negotiate with the current homeowner on price, which is something you generally don’t get to do with a builder. Builders know their material and construction costs, and they have a price set for the model you’re buying. So, if you want to negotiate, then maybe an existing home will be best.

For many families, having an established neighborhood is also important. Some buyers like to know the neighbors, if it’s family-friendly, and traffic patterns before making a commitment. When you buy new construction, you won’t have a full view of some of those details until the lots around you are sold.

Finally, timing comes into play. With an existing home, you can move in based on the timeline you agree to with the sellers. With new construction, you need to wait for the house to be built. Depending on the time of the year you’re buying and the region you’re in, the weather can also be a factor in the timeframe. This is something really important to keep in mind, especially if you need to move sooner rather than later.

How long have you lived in your current Maui home? If it’s been a while, you may be thinking about moving. According to a recent study by the National Association of Realtors (NAR), in 2019, homeowners were living in their homes for an average of 10 years. That’s a long time to be in one place, considering the average length of time homeowners used to stay put hovered closer to 6 years.

With today’s changing homebuyer needs, especially given how the current health crisis has altered our daily lifestyles, many homeowners are reconsidering where they’re at and thinking about moving to a home with more space for their families.

The real estate market has changed in many ways over the past 10 years, and current homeowners are earning much more equity today than they used to have. According to CoreLogic, in the first quarter of 2020 alone, the average homeowner gained approximately $9,600 in equity. If you’re considering selling your house right now, you may have accumulated more equity to put toward a move than you realize.

Dialing back 10 years, many homeowners also locked in a fairly low mortgage rate. In 2010, the average rate was only 4.09%. This motivated homeowners to stay in their houses longer than usual to keep their rate low, rather than moving. Just last Thursday, however, average mortgage rates hit a new historic low at 2.86%. Sam Khater, Chief Economist at Freddie Mac explains: “Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery…These low rates have ignited robust purchase demand activity, which is up twenty-five percent from a year ago and has been growing at double digit rates for four consecutive months.”

Ten years ago, you probably wouldn’t have imagined a mortgage rate under 3%. Depending on your current mortgage scenario, making a move into a new home and locking in a significantly lower rate than you have now could save you greatly on a monthly basis, and over the life of your loan.

As a homeowner in Maui, you have a huge opportunity to move up right now. Whether you want to save more each month or get more home for your money based on your family’s changing needs, it’s a great time to reach out to a local real estate professional in your area. Buyers are actively looking for more homes to buy, and you can win big by making a move if the time is right for you.

Existing-home sales jumped 25% in July from June, beating the prior record gain of 21% set a month earlier, as low mortgage rates fueled demand for real estate across the United States.

Sales of single-family homes, townhomes, condominiums, and co-ops rose to a seasonally adjusted 5.86 million, the highest level since 2006, the National Association of Realtors said in a recent report. The median price increased 8.5% from a year ago to $304,100, breaking through the $300,000 threshold for the first time.

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

The average U.S. rate for a 30-year fixed mortgage fell to a record low of 2.88% in the first week of August, the eighth time in 2020 the weekly rate has set a record in a Freddie Mac series that goes back almost five decades. Lenders qualify applicants by the amount of the monthly payment measured against their income, and when financing costs go down the payment shrinks. That also means borrowers often find they qualify for larger mortgages, which means they can pay more for a property they want.

Properties remained on the market for an average of 22 days in July, down from 29 days in July 2019, the NAR report said. About 68% of homes sold in July 2020 were on the market for less than a month.

The low mortgage rates are pulling more first-time buyers into the market, Yun said. About 34% of sales in July were to people who were purchasing their first homes, he said. That’s up from 32% a year ago.

Some Americans may be under the impression that high unemployment rates and recession are prompting a gloomy housing picture. They’re wrong. Realtor.com® highlights a few common COVID-19-related myths that may need some debunking.

It’s a bad time to sell a home.

After all, homeowners may be skittish with unemployment so high and a pandemic raging on. How could it possibly be a good time to sell?

The reality is, buyers are frantically wanting a place to call home, but many homeowners are choosing not to sell. New-home listings plunged 14% in early July compared to a year ago. The total inventory is 32% lower year over year, according to realtor.com®’s Weekly Housing Trends report for July 11.

“Given the pandemic and uncertainty it’s caused, the general sentiment [among some owners] is that now is not a good time to sell your home,” says Danielle Hale, realtor.com®’s chief economist. “Yet so far, the data suggests the opposite—that buyers outnumber sellers in the housing market, which means it’s better to be a seller than a buyer.”

Home buyers eager to purchase are sparking bidding wars as they compete for limited inventory. “Multiple offers could be fairly common over the next few months,” says Lawrence Yun, NAR’s chief economist.

Home prices are dropping.

Home prices are actually rising. During the first quarter of 2020, the national median price for single-family homes increased by 7.7% to $274,600. “We’re seeing home prices grow faster than pre-COVID-19,” Hale says. “In fact, they are on pace with the home price growth we saw this time last year.”

Record low mortgage rates boost buying power, Yun adds. “And when combined with a lack of supply will result in higher and higher home prices,” he says.

Everyone is rushing to the suburbs.

Urban centers certainly pose more challenges for social distancing during a pandemic than less densely populated areas. Overall, listings in the suburbs are showing higher interest nationwide. In May, the number of views on properties in suburban ZIP codes rose 13%—nearly double the views that listings in urban areas received, according to realtor.com® research.

“We have seen homebuying demand recover faster in the suburbs and rural areas than urban areas,” Hale says. “There’s also evidence of home shoppers in cities that were hit early and hard by COVID-19, such as New York and Philadelphia, are seeking homes in nearby smaller communities at a higher pace, like the Poconos.”

That said, not everyone is leaving the city. This may be partially centered to the wealthy, who can afford to do so. Also, it’s not easy for everyone to pick up and move.