First-time home buyers surprisingly optimistic about 2022
Roseville, Calif.- The current competitive housing market here in Roseville and the Sacramento area is difficult for home buyers and particularly on first time buyers. They don't have equity in a current home to sell and must use savings. The amount they need (down payment and closing costs) has been and will continue to rise. Home prices continue to increase.
A recent survey conducted by Realtor.com indicates only about one quarter of first time buyers were successfully able to buy a home so far this year. We just got a young couple in contract after 13 previous offers were rejected starting in November 2020.
Although 2021 was not a great year for first time buyers, the Realtor.com survey results say, "Despite a challenging year, aspiring first-time home buyers are surprisingly optimistic about 2022. They're looking at the new year as a fresh opportunity to make their dreams of owning a home come true and our survey suggests that they're armed with information and ready to compete for their first home."
The primary tactic, according to the survey is a willingness to make offers over the asking price:
- 32 percent: Up to 5 percent above asking
- 17 percent: 6 to 10 percent above asking
- 7 percent: 11 to 15 percent above asking
- 39 percent – Will not offer above list price
From my perspective there is more first time buyers need to consider if they are to be successful in our current market. These are:
- Shorten or remove contingencies for investigation, appraisal, and loan
- Make offers "As Is" with no seller repairs
- Increase Ernest Money Deposit
- Pay more of the closing costs
The buyers I mentioned above offered 12 percent more than the asking price. Reduced their investigation contingency period from a standard 17 to 10-days. Because of their financial strength they were willing to remove the appraisal and loan contingencies. I addition they offered to pay almost all closing costs. They still had to deal with a Seller Multiple Counteroffer before going into contract. We are currently in escrow and our buyers are thrilled.