Buyers face challenges in any housing market – and 2024 is no different, even in our city different, Santa Fe market. Why? Santa Fe is a destination market. New Mexico’s Land of Enchantment has global appeal with our culture, architecture, climate and landscape. Now, with higher mortgage rates and rising prices, coupled with our still limited but growing supply of homes for sale, there’s a lot for every Santa Fe homebuyer to consider.
But, there’s one way to avoid getting tripped up – by beginning with a buyer consultation to explore your housing needs, dreams and certainly options. Learning more about the buying process will help you make better choices in our Santa Fe market, where buyer demand comes from outside New Mexico. Here are some insights to help you avoid some of the most common mistakes homebuyers are making right now.
Delaying Your Loan Approval
As part of the homebuying process, speaking with a lender to review your goals, budget and your finances is the best step to your affordability and what loan products are available, especially if you are a first time homebuyer or veteran. From the start you will know what you can borrow so you can really wrap your head around the financial side of things before you start looking at homes. While house hunting can be a lot more fun, getting leverage with a pre-approval is the key.
Holding Out For Perfection
While you may have a long list of must-haves and nice-to-haves, you need to be realistic about your home search. Even though your ideal state is you find a home that checks every box, you may need to be willing to compromise – especially since an talking about finances, you don’t want to do this out of order. Make sure you get your pre-approval first. As CNET explains:
“If you wait to get preapproved until the last minute, you might be scrambling to contact a lender and miss the opportunity to put a bid on a home.”
Inventory is growing and there are more opportunities. Plus, a home that has everything you want may be too pricey. As Investopedia puts it:
“When you expect to find the perfect home, you could prolong the homebuying process by holding out for something better. Or you could end up paying more for a home just because it meets all your needs.”
Instead, think out of the box and adjust some of your must-haves and focus on good bones where you can add anything else you may need down the line. It is important to understand that your mortgage payment although fixed, can change with increases in property taxes and insurance. Future maintenance costs and home owner association dues can also impact your budget.
Buying More House Than You Can Afford
With today’s mortgage rates and home prices, there’s no arguing Santa Fe home prices are higher now than the pandemic. Yet, at the same time, price reductions are increasing making some homes more affordable! And while it may be tempting to stretch your finances a bit further than you’re comfortable with to make sure you get the house, you want to avoid overextending your budget. Make sure you talk with both your lender and buyer broker about how changing mortgage rates impact your monthly payment. Bankrate offers this advice:
“Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations. Every borrower’s case is different, so factor in your whole financial profile when determining how much house you can afford.”
At the same time, you might want to use your NET income vs your gross. Why? As mentioned earlier, mortgage payments can increase with changes in property taxes and insurance. And then, there is always the costs of maintaining a home. For example, in Santa Fe, our infamous flat roofs can leak if not maintained with preventive care.
Not Working with an Experienced Santa Fe Broker
This last one may be the most important of all. Buying a home is a process that involves a lot of steps, beyond the paperwork and negotiation. Your buyer broker should have experience with and knowledge of different types of properties, a broad range of neighborhoods and subdivisions, details about lead paint, easements, septic systems, water, short term rentals and historic, city and county regulations. Rather than take all of this on yourself, it’s a good idea to have a pro working for you with representation as our buyer broker. An experienced Santa Fe buyer broker can reduce your stress and help the process go smoothly. As CNET explains:
“Attempting to buy a home without a real estate agent makes the process more arduous than it needs to be. An broker can give you professional guidance, market expertise and support, which will save you time, money and stress. They can also increase your chances of finding the right home so you don’t have to spend hours scouring the internet for listings.”
Bottom Line
Mistakes can cost you time, frustration, and money. If you want to buy a home in today’s Santa Fe market, let’s connect and begin with a buyer consultation. Remember, not all Realtors are the same. Call or text Emily Medvec at 505-660-4541 to set an appointment and learn how she can help you avoid these missteps and save you valuable time and money for your next move. Whether you choose Emily Medvec or someone else, know moving forward by August 17th, 2024 a written buyer representation agreement will be required. Thank you for reading, Emily Medvec
