10 Most Googled Questions about Real Estate in 2022
Presenting our comprehensive guide for the most frequently asked real estate questions of the year.
The world of real estate is filled with many twists and turns, ever-changing trends, and data that, at times, can be somewhat unpredictable — at least for the ordinary non-specialist. Every day, people take to the internet to research the industry and understand it better for the purpose of either buying, selling, or investing in property. If you plan on diving into real estate for the first time, you’re probably curious to know about the most googled real estate questions of 2022. We’ve comprehensively answered those questions and hope they help you in your real estate endeavors.
Should I buy or rent property?
Perhaps the most googled real estate question of 2022 – if not of all time – many first-time homeowners find themselves trapped between a familiar crossroads: to buy or to rent. The choice comes down to your needs.
The current high-interest rate for fixed mortgages tilts the scales in favor of renters. The following statistics are per NerdWallet. Let’s say you can buy a house in Austin for $500,000 with a down payment of $50,000. If you can rent the same place for $2,000 or less per month, it would be cheaper to rent up until the 30th year — the last year of a fixed 30-year mortgage — at which point you would break even.
The above calculation is subject to many factors outside the scope of the scenario. Renting is nearly always more favorable for prospective tenants unsure of how long they’ll live in Austin. Renters can split living expenses with trustworthy roommates. On the other hand, families may prefer the long-term security of a mortgage.
What type of home fits my budget?
There are various types of homes; the most commonly found are single-family homes, townhomes, and condos. There is no one-to-one correspondence between buyer demographics and home types. A family might find a condo in their best interest, and an Austin professional could decide to pounce on a large home they love.
The best luxury properties are highly personal, and so is your preference for home type. To narrow options, focus on the tangible differences between single-family homes, townhomes, and condos. Regarding upkeep and maintenance, do you prefer a hands-on, DIY approach? Or do lock-and-leave properties better suit your lifestyle? What about pets? Be sure to talk it through with a trusted local agent.
Do I need a real estate agent?
If the first question isn’t the most googled real estate question of 2022, then this one is. In short: no, you don’t need an agent, but it’s strongly recommended you recruit one regardless. Agents have the skills, resources, and knowledge to facilitate transactions smoothly and efficiently. If you’re buying, your agent’s commission ends up being paid by the seller. A real estate agent can help you determine what fits your budget, learn about different areas of town, scrutinize zonings for schools, pick types of homes, and negotiate the contract terms keeping your best interest in mind.
How much should I put down for a down payment?
The amount you put down for a down payment depends mainly on your budget. Go for it if you have the money to allot toward a 20% down payment while accounting for the rest of your expenses. There are several benefits to a larger down payment amount:
- Lower monthly mortgage payments
- Less interest paid over the loan term
- You may not need mortgage insurance
If you cannot afford 20%, there’s nothing wrong with a 5% down payment. You always need to evaluate your budget and assess your needs first. You may also qualify for an FHA loan, which allows a 3.5% down payment. A meeting with a trusted lender in collaboration with your real estate agent can help determine the best loan package for you as a buyer. There are many options to explore, so don’t let the downpayment stand in the way of your home purchase.
When is the best time to apply for a mortgage?
The general rule of thumb is to apply for a mortgage at the beginning of the month. Lenders prefer receiving as many applications as possible at the start of a new month, granting them sufficient time to gather the documents they need and prepare for the final approval. Applying for a loan should be done before starting your search on the market. It will help determine your budget for a home; this way, you will not be discouraged by falling in love with a home you cannot afford. With a loan in hand, you can quickly decide and submit an offer if you find the perfect home quickly.
Should I buy in a seller’s market?
A seller’s market is one in which demand exceeds inventory, giving sellers the upper hand when pricing and negotiating deals. While there’s nothing inherently wrong about buying in a seller’s market, you need to assess your budget and needs beforehand. Be advised that home prices will be much higher, and there may not be much room for negotiating a lower value. There’s high demand, and with high demand comes competition from other buyers. However, we can help you win that coveted house with our many strategies that sometimes may not be the highest price for the home. Other factors can come into play, like lease-back options, lower option periods, and higher earnest money.
If you’ve found the home of your dreams and have the budget to compete against other buyers, it’s still important to sit down and weigh your options. Go for the purchase only if you’re genuinely, wholly committed.
Can I change my mind on a contract?
Yes. There are a few permissible ways to back out of a contract:
- Submit a revocation letter as soon as you’ve changed your mind before any contract has been signed.
- Use official, state-issued forms of withdrawal.
- Respond to a counteroffer with a rejection.
- Exercise your option period, also known as the due diligence period, will allow you to back out if the buyer finds the property is not what they expected. It is an unrestricted right to terminate the contract, and time is of the essence and applies. So be aware of your deadlines.
- Suppose you want to cancel after accepting and signing. In that case, you’re out of luck unless the property fails to meet your contingencies, such as financing contingencies or appraisal value per the lender. Please check with your agent for more detailed information.
Is the housing market on the verge of a crash?
It’s been the talk of the country — some worry the market will crash as inflation and prices soar. According to experts, however, that may not be the case. Demand continues to rise, and supply isn’t keeping up. The limited housing inventory will likely result in higher prices, keeping the market hot.
Why are home prices so high right now?
Inflation is the main culprit behind skyrocketing prices. As inflation rises, the Federal Reserve raises interest rates, and as those rates rise, so do mortgage rates. This creates an unfortunate vicious cycle that keeps prices climbing and climbing. We are seeing some prices adjust.
Is the housing market starting to slow down?
Rather than a total crash, the housing market is projected to cool and slow down. Buyers have kept away from the market due to high mortgage rates and home prices, resulting in sellers lowering their prices little by little to entice interest again. Although prices won’t drop sharply, they are starting to decline. The coming year may see a surge of renewed market activity.
If you have more questions or are interested in buying or selling real estate in the coming months, reach out to a real estate agent specializing in the region you’re looking at. If you’ve set your sights on Austin, TX, and the surrounding area, connect with Noa Levy. With over 18 years of experience and over $600 million in total sales, Noa has rightfully earned her position in the top 1% in the Austin metropolitan area. You’ll find no better agent than Noa – contact her today! She’ll be happy to assist you in your real estate endeavors.