Tastemade
Andrew Tyree, host of the reality TV series “Beyond the Block,” has returned for Season 2—and not a moment too soon.
“It’s crazy out there! Almost everything has changed,” says the Realtor®.
Premiering on Thursday on Tastemade (a streaming network available on Amazon Prime, YouTube TV, Roku, and other platforms), the second season of the series shows Tyree helping homebuyers navigate a surreal real estate market that’s been rocked by the coronavirus pandemic.
“Nobody has ever seen the market act like this before,” he says. “There is no precedent on how things are going to go in the future.”
The homebuyers Tyree helps—in Richmond, VA; Charleston, SC; Nashville, TN; Atlanta; and Orlando, FL—have budgets ranging from about $200,000 to $565,000. But even buyers with ample funds tend to struggle amid insane competition and slim inventory.
We chatted with Tyree about the unique challenges facing buyers today, and how he helps homebuyers achieve their real estate dreams despite the odds.
How has the pandemic affected homebuying?
One, there’s a lot more buying going on. The emphasis used to be on living close to jobs, city centers, transportation, restaurants and bars, things like that, so living in a one-bedroom loft was perfectly fine for lots of people.
Then people went through a year and a half of being in quarantine, and are, like, “I need space, I need room for a gym, I need an office.” So there are a lot more buyers on the market.
At the same time, there is way less inventory. A lot of people who were considering selling their homes before have decided, “No, no, no! I need to hold on to my house, because space is so important!” People who were thinking of downsizing are holding on, kids are moving back. It’s a challenge for buyers.
The kinds of spaces that are in demand have also changed, right?
Definitely! People who would consider living in a townhouse or a condo before are now thinking, “I want outdoor space or a house with a yard.” People are considering how much time they spend outdoors now—they just want to be able to go out, get some fresh air, walk around.
Tastemade
What about location?
Small towns right outside of cities are really booming. For example, the family I worked with in Georgia—instead of going to Atlanta proper, we went to Alpharetta. I hadn’t even heard of that until I went, and it’s a beautiful suburb with great restaurants, shops, and better home prices.
People are building amazing communities with culture and restaurants outside of the big cities, because it’s not as congested. Spend less money, get more space.
There’s been such an uptick in buyers, we can’t help but wonder, where are their down payments coming from?
Several sources. A lot of the buyers didn’t spend nearly as much money in the past year and a half as they usually do—on things like entertainment, transportation, vacations. Some people had been saving for a while, but buying a house wasn’t a priority and they were sitting on it. Others got loans from parents or other relatives.
Also, interest rates haven’t been this low in over 20 years, so monthly payments are lower. In the middle of the pandemic, interest rates dropped so low, if you had $10,000 to $20,000 saved, you could put a down payment on a pretty nice–sized house. In some places you only need 3.5% down.
Also, people are going in on houses together, and putting more people on their loans. I’ve seen a mom, grandma, uncle, and sister all going in together to buy a four-bedroom house.
How has the pandemic affected home prices?
It’s totally the opposite of how it used to be. You used to see a listing and think, “Well it says $500,000, but l bet I can get it for $475,000.”
Tastemade
These days, something like 98% of homes sold are going well over ask. Like, a ridiculous amount over ask.
How do you advise buyers to deal with bidding wars and wildly inflated pricing?
If I’m really being completely honest with my buyers, sometimes I tell them to wait just a little bit. In the past I’ve always said, “Hey, the market is not going to improve for you because the cost of real estate is always going to go up, so if you’re interested in buying you might as well just buy as soon as you’re ready.”
But recently, I’ve been saying, “Hey, if you can hold out six to eight months, there may be a correction.” This rush to buy a home may fizzle out toward the end of this year, maybe things will get back to normal.
And if they can’t wait?
Then they need to be ready to pay over ask. Maybe find a home that’s a little below your budget so you have room to maneuver. Maybe think outside the box on your neighborhood—maybe the prime area you were looking at might not be the area for you.
Also, get creative. Make sure you’re very early on your offer. Make sure you’re paying attention to when the house is coming on the market and be one of the first people to put an offer in. That matters.
Tastemade
Dropping contingencies can be a powerful bargaining tool, but it’s risky. What do you advise?
I personally would not waive inspection contingencies, because they’ll allow you to back out of the deal if the inspection shows that the house is too terrible. If you waive those contingencies, you’re pretty much locked in there after three days. So take care.
A lot of people are making offers way over ask, and the bank won’t loan them as much as they’ve offered, so the deal falls through. How do you deal with that?
That happens a lot these days. There are ways to deal with it. One is to offer cash, if at all possible. A lot of times a cash offer will take precedence over a higher offer with a mortgage, because the seller knows they won’t have to deal with a bank.
Acceptance of your offer also may depend on how much you’re putting down. If you offer $100,000 over ask, and you actually have that $100,000 liquid, that changes things. The bank may not loan you the $800,000, but they’ll loan you $700,000, and you can make up the difference with the extra cash.
Tastemade
Any other strategies for dealing with this crazy market?
You also have to realize that houses are not necessarily forever. People think, “I have to pick one that I’ll be in for the rest of my life.” But not anymore. You can buy a house and plan on selling it in five years. So this might not be the neighborhood you wanted, but at least it’s adjacent, and if it’s close, don’t feel like you’re settling. The neighborhood you end up in might be on the rise—you can build your equity in it. Then, in three to five years you might be able to make some money on it and move where you really wanted to live in the first place.
The post ‘Beyond the Block’ Host Andrew Tyree Reveals What It Truly Takes To Buy a House Today appeared first on Real Estate News & Insights | realtor.com®.
source https://www.realtor.com/news/trends/beyond-the-block-andrew-tyree-what-it-takes-to-buy-a-house-today/
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