The Spring market is here and the real estate market has been particularly vibrant. It’s time to discuss what the current supply and demand of homes in the DC metro area may mean for you in the home buying process. We believe that knowing what to expect upfront will be helpful as you hit the streets looking for your new home.

The current demand far outweighs supply. Overall, many of our home buyers are feeling the stress of a rushed process. The following are some of the specific factors that affect the home buyer in today’s market:

• Homes are selling very quickly. The market has many highly qualified buyers and there are very few sellers. As a result, homes are staying on the market for a very short period. On average, homes are on the market for about five days less than they were 12 months ago. Many homes that come onto the market for sale are receiving multiple offers from buyers. When the seller is reviewing multiple offers your timeline to close is critical. All things considered, the offer with the shorter turn time is likely to win.
• Mortgage companies and loan officers are working with shorter time frames to complete a loan than ever before. The flexibility to move quickly is vital, because it will make your offer more attractive in a multiple offer situation. Your lender’s ability to close a loan quickly should be of great importance to you. Where 30 days from contract to close used to be the market standard, we are seeing most loans close within 14-21 days.
• It is uncommon to contract the first property upon which you make an offer. Depending on the area and price point, the market can be very competitive. Do not be discouraged! If your first few offers are not accepted, it is important to recognize that this is often a condition of outside market factors. Keep looking! With everyone working together, the perfect home is out there for you.
• Interest rates are changing and trending up. The Federal government has made clear that we should expect two more rate hikes by the end of this year. Be aware of this and do not let it scare you into buying something you otherwise wouldn’t. Keep in touch with your loan officer throughout your home search so that you can be aware if the monthly payment you expected has increased because of interest rates. Being in constant communication with your loan officer will be a benefit to you.

The most important thing that you can do as a buyer to operate effectively in the market, is to be prepared before you begin to look at (and fall in love with) homes. It’s important to do all the work with your lender and realtor to prepare yourself to make a strong offer on the home that you want. It is important to take the time to talk to your lender and let him/her explain things to you that you may not think are very important in the beginning. Obtaining a mortgage loan is a process, not an event (more details on this here). Now more than ever, it is important to have a team of people working on your behalf that you can both trust and rely on.

It is also important to know that your experience will likely be an emotional one, and knowing that upfront will hopefully help to alleviate stress throughout the process.