First-time homebuyers struggle to find homes in hot market
Marcus and Danelle Marsh bought their first home during the COVID-19 pandemic.
METRO DETROIT – Buying your first home is stressful anytime, but especially during a global health crisis.
But as COVID-19 continues to rage, local realtors say they are actually seeing a surge in customers hoping to buy their first home.
“There is an increase in first-time buyers because there are more people who can afford to buy homes they couldn’t afford before,” said Debbie Robbins, associate broker at Remax Classic.
Buyers also want to take advantage of the record-low interest rates, she said.
“The upside is that the interest rates are really low so people can afford more of a home than they might think,” Robbins said.
According to Real Estate One realtor Patricia Phillips, more time at home due to COVID-19 is affecting what buyers are looking for in their first home.
“Home has become where everything is now done,” she said. “We used to see wide open spaces. Now we see the need for a home office or an isolated study, even multiple workspaces, as sometimes both parents and their children have to work from home so each must have their own space. “
Today rooms and spaces in homes have to serve multiple purposes. An office can also serve as a training room, and a family room may need to be turned into a virtual classroom during the day.
And outside areas are more popular than ever.
“As homes have become everything, you have to be able to spread out and entertain at home – and outdoor entertainment is a big part of that,” said Phillips.
But to get the home of their dreams, home buyers need to act quickly because the housing stock is at an all-time low.
“We see a lot of first-time buyers every spring, but unfortunately there aren’t that many homes in the market due to the pandemic,” Robbins said. “People just want to stay where they are. That means inventory was limited for first-time buyers, and this is done on a national basis. We have far fewer houses on the market in the spring than we would expect. “
The lack of inventory, Phillips said, makes it frustrating to be a buyer in this market.
“For the last houses that I have listed, we had 20 to 30 offers of 50 to 60 demonstrations within two days. This becomes very frustrating for both buyers and sellers and agents as we have to go through and review all of these offers and people. People get mad at you because they didn’t get a chance to see it or because all of the performances were taped. “
On average, buyers make at least six offers before they secure a home.
“It’s six to eight times – sometimes I’ve heard up to nine or ten houses – that they make an offer before they land in a house. That’s the norm at the moment, six offers. If you manage to get a home and haven’t made six offers, you’re blessed, ”said Phillips.
First-time buyers Marcus and Danelle Marsh of Detroit said it took three months and more than five deals to be successful.
“Although this is our first time and we didn’t know what to expect, we were a little frustrated with the process. But it’s all good because what we ended up with has the features we wanted, so we’re grateful, ”said Danelle Marsh.
The couple were looking for a home that was being modernized, had three bedrooms, a modern kitchen, a finished basement, and a garage.
To crowd out the competition, they reluctantly poured some extra money – which they had originally hoped for home improvement – into their offering. But it has worked to their advantage and they are currently waiting for the deadline for their first home in Eastpointe.
As in the swamps, many buyers get creative and use various tools as leverage to win deals.
“Demand is very high, so we see people doing a lot of unique things in relation to what they are offering. First of all, the offers are very well received. They don’t ask for anything from the seller – no home guarantees, no repairs, nothing – and buyers offer things like valuation guarantees. It is common practice to limit the valuation guarantee to $ 5,000, $ 7,000, or $ 10,000, which means that this amount is above the estimated value so as not to exceed the retail price of Blank. It was only last week that I received a no-cap for the valuation guarantee. So regardless of the valuation, they’ll pay the purchase price of the house, ”said Phillips.
If you want to be successful, you have to do something to make your offer stand out.
“Sometimes it’s the timing. Maybe they need time to find another home and you don’t have an urgent moving situation so you can leave the seller a longer or free occupancy. There are other ways to pass the value on to a seller than sometimes just the selling price. You have to be competitive, ”she said. “You just have to stick with it. You just have to stay in the game. “