If you’re in the market for a home this year, you might be feeling disheartened. Cash buyers and a scarcity of available properties have driven up housing prices, making it challenging to compete, especially without a cash offer that often exceeds the list price. However, purchasing a house on a tight budget is entirely feasible if you know where to begin.
The year 2021 was marked by shortages – not just in toilet paper, like in 2020, but in essential goods like homes, vehicles, and even materials like foam for sofas and recliners. If you’re in a situation where your lease is expiring, and you fear your landlord might decide to sell the property, you’re likely feeling the pressure. Rental options are also scarce. So, what’s your plan?
Renting as a Temporary Solution
My family and I moved to Florida just as the pandemic was causing widespread lockdowns. We decided to rent for a year before committing to homeownership. This allowed us to tackle a substantial amount of debt we had accumulated and get acquainted with the area. We wanted to learn which neighborhoods were prone to flooding during heavy rains and hurricanes, and which ones were safer for our children.
The real estate market in our small town exploded, much like it did across the US. The key difference was the influx of wealth into our beach town, resulting in intense competition among cash buyers for available homes.
I previously explained why we chose not to use Navy Federal Credit Union for our mortgage and detailed the process leading up to closing with Quicken Loans, also known as Rocket Mortgage. In summary, Rocket Mortgage turned out to be our savior. We were able to purchase the perfect home within our budget, which was approximately $50,000 more than Navy Federal was willing to lend us.
We closed the deal on May 26, 2021, and we’ve been working on improving the house ever since. But how did we manage to secure this home before anyone else had a chance to see it?
The Power of Networking
I connected with several Realtors in our local market on Facebook. Sometimes, fate provides exactly what you need when you need it. One of my Realtor friends messaged me on Facebook, informing me that she would be listing a property in a week. It would have been against the rules for her to show us the home before listing it, so we patiently waited. As soon as the listing went live in the MLS, we visited the property just 30 minutes later.
We submitted a strong offer, even above the asking price, confident that the house would appraise for more. However, our optimism was misplaced. Our home appraised for $20,000 less than our offer! It was a setback, but the sellers graciously agreed to reduce the price by $17,500, allowing us to close on time.
Navy Federal Credit Union’s RealtyPlus Program
When we initially applied for a loan through Navy Federal as new members (non-military), we had the opportunity to participate in a buyers’ rebate program. By using one of Navy Fed’s RealtyPlus partners, you receive a rebate deposited into your Navy Federal savings account within 10-14 days after closing.
The best part? You don’t have to finance your home through Navy Federal to benefit from this program. After closing, we received $1,750 back. It’s important to note that this money comes directly from the buyers’ agent’s commission. However, there’s no need to feel guilty about it. Agents who engage in referral programs willingly pay this fee to gain access to potential buyers. It’s a win-win situation for both parties.
Conclusion
Purchasing a home on a tight budget is entirely achievable. It requires a combination of faith, patience, and networking. Rushing into a decision can lead to regrets, so take your time and make informed choices. Your dream home may be within reach sooner than you think!