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Are you thinking about buying or selling your house this year? If so, there are a few things you should consider. In 2021, the Minneapolis/Saint Paul market has seen a 51.6% decrease
in the number of homes for sale compared to 2020.
Plus, due to COVID, there are shortages in building materials, causing a significant decline in new homes for purchase.
These two scenarios, coupled with the high demand, have caused buyers to compete for properties and often paying more than the asking price
. Sellers accept offers in days or even hours of their house being on the market instead of the average 16 days.
Buyers are responding to this tough market by submitting multiple offers, waiving inspections
and even submitting offers – sight unseen. While this may be a way to win a bidding war, it may come at a significant cost long term.
The best offer is probably the one with the strongest finances, meaning it is either all cash with proof of funds or a pre-approved buyer
with documented financing, even if it's not the highest offer. Buyers should be aware that, in general, mortgage lenders will not approve a loan that is more than the house's value. If the appraisal comes in significantly lower than the offer, it can put the sale of the home at risk or require the buyer to pay the difference out of their own funds.
It is a sellers' market. But that also means the seller may become a buyer and experience the same issues as a buyer. It's ideal to have your next home already lined up, but that may be easier said than done. Check out our tips to sell your house.
Times like these are reminiscent of 2006 when houses were being sold considerably over the asking price. Do your due diligence, don't be discouraged; your dream home is out there and your patience will be a virtue during these tumultuous times.
If you need to talk to someone about financing your next home, TruStone Home Mortgage
is always here to help.
|| A note from Nathan Grunzke, Chief Mortgage Officer
TruStone Home Mortgage is a division of TruStone Financial.
Equal Housing Opportunity
Editor’s note: some of the information in this article was sourced from Zillow, Money, Minnesota Realtors
This blog article is intended to provide you with a general understanding of the subject matter. It is not intended to provide legal, accounting, or other professional advice and should not be relied on as such. Information may have changed since the publication date.