Help for First-Time Home Buyers: Making the Most of a Historic Housing Market

This article is sponsored by Summit Credit Union, a trusted local financial partner for families. Whether you are looking to buy your first home, purchase a vehicle, or want to establish healthy budget habits, the experts at Summit Credit Union are here to help.

First-time home buyers are finding themselves in a whirlwind of a housing market right now! With mortgage rates still near historic lows – and after spending more time than ever inside their homes over the past year – seemingly more people than ever are making the decision: It’s time to buy my first home.

But with so many house-seekers on the market, competition is intense. Plus, median Wisconsin house prices are up 10% while the number of listings available has decreased by 30% over the past year, making the whole process feel overwhelming to many prospective buyers.

Houses are selling FAST, many before they even officially hit the market, and buyers are encountering everything from bidding wars to a ton of hoop-jumping to make themselves the most attractive offer on the table. Before you get scared away from looking for your first home, it’s important to talk to the experts about what you need to know to maximize your success in this market.

Where Should First-Time Home Buyers Start?

The first two crucial steps in this process are finding a Realtor AND a financial institution you can trust. Summit Credit Union works hard to establish a relationship with its members based on a foundation of financial education and wellness so they can walk with you every step of the way of your financial journey, no matter where it leads you.

First-time homebuyers certainly have a lot of questions about how to navigate the market and come away with their dream home. We’ve teamed up with Summit Credit Union and local Realtor Lisa Eastman of Keller Williams to put minds at ease and answer some of these pressing questions.

Summit Credit Union – The #1 Mortgage Lender in Wisconsin*

Summit is the #1 Mortgage Lender in Wisconsin and it comes as no surprise. Here are a few things they do, to make it such a smooth process:

  • Summit offers FREE pre-approval – the best first step to take in the home buying journey!
    • Pre-approval can take as little as 15 minutes once you’ve submitted your paperwork
  • Summit offers $1,000 off closing costs for first-time buyers¹
  • Potential homebuyers can meet with a Summit Mortgage Loan Officer (MLO) to get the process started – by phone, video or in-branch.
    • A Summit MLO will get in touch with you within 24 hours of you reaching out
  • Summit also offers a First-Time Homebuyers Guide, to give more insight into the process

Q&A for First-Time Home Buyers : Making the Most of a Wild Housing Market

We are thrilled to welcome Lisa Eastman, Realtor with Keller Williams Realty, as our local expert, ready to help answer the pressing questions first-time buyers need answered. Lisa currently resides in the North Shore area of Milwaukee and has loved making this part of Wisconsin her home for over 15 years. She has been a licensed Realtor since 2015 and has dedicated her career to educating buyers and sellers in the community and helping them to reach their real estate goals!

What is making this market in particular so exciting for first-time home buyers?

Today’s real estate market can come off as very daunting for buyers, it’s also a really unique and exciting time, especially for first-time homebuyers – a little patience may be needed though. Interest rates are still incredibly low, which means that even though home prices have gone up, buyers may be paying less per month for a mortgage and less over the life of the loan than they would with higher interest rates. For buyers this also means that there is the possibility they could be paying less for their mortgage than what they were paying in rent; and in the process they are investing in themselves and building equity in a home that may help them when they get to their retirement stage of life. Additionally, during the last year people were spending all of their time at home – whether it was alone, with a significant other, or with kids; almost every meal, work, school and leisure time were spent home and living spaces started to feel smaller than usual. Many buyers in today’s market are more excited than ever to have larger or additional living spaces, but especially an outdoor space of their own!

What’s been unique about navigating this market as a first time buyer? How can a first time buyer overcome these obstacles?

Today’s housing market has had a lot of unique challenges. The number of listings available has decreased by 30%, lumber costs are rising making it harder to build and more buyers are searching for new homes – this all leads to a big supply and demand issue which has led to a 10% increase in the median house price. Another part of this market that makes it extremely unique are the showing protocols put in place due to the pandemic. Many sellers are not allowing more than one buyer in the home at a time and then limiting the showings to only 30 minutes. Choosing a home you’ve only been in for 30 minutes can be extremely daunting. The biggest ways to overcome these obstacles are simply: patience and open communication. Don’t rush to settle on the home because so few homes have come on the market – this is a big investment and should not be rushed. If the home doesn’t feel right, keep looking. Also, having open communication with the realtor is incredibly vital. As professionals we are here to help guide buyers in the process and when buyers are letting us know what they love, hate and everything in between we are better able to serve our buyers by pointing out all the pros and cons to a house that buyers may have overlooked during such a short showing time.

Another way to overcome these obstacles is to work with your lender and realtor to have a plan in place before you see any houses – get pre-approved, verify funds, review the offer terms, etc., so that when you finally find the house you want to write an offer for you are ready to move quickly. Homes are typically on the market for only a short period of time so being able to move fast is key. Finally since the market has been so competitive the number one tip I have told my buyers is to not focus on the homes priced at the top of their budget, but focus on the ones $25,000-$50,000 under their budget. The reason for this is because it gives us the ability to offer higher if we are competing against other buyers.

If someone is just starting the process of looking for their first home, what should their very first steps be to set themselves up for success?

The biggest ways for buyers to set themselves up for success is to find a trusted team – lender and realtor. Before looking at any homes buyers should be working with their lender to get pre-approved and all their financial documents submitted for review. Pre-approvals are crucial to have prior to starting the home search because it tells buyers how much they can afford prior to looking, and it is submitted with an offer to show sellers that the buyers are qualified. Summit Credit Union offers free pre-approvals and once all documents have been submitted the pre-approval process can take as little as 15 minutes so getting started on this step is quick and easy. The next step would be to set up an initial buyer consultation with a realtor to go over the home buying process, review important documents, and of course the fun part – discussing everything they are looking for in their dream home!

What are the big questions first-time buyers are asking you as a Realtor right now?

In today’s market the number one question I get asked is “how long will it take to find a home and am I going to have to over pay for a home?” The first part of this question always varies based on what the individual buyer is looking for. We may get lucky and it takes a week or two, or we may test our patience and be looking for a few months. Every situation is different, but the right house is out there! The second part of this question can be more complicated. Our current market is supporting the rising home prices and the market value of a home is based on what someone is willing to pay, so the idea of overpaying can be subjective. That said, the good news is that if you are including an appraisal contingency in an offer that we would have a third party appraiser to come in and determine the value of the house. If that value is lower than the offer we get to start negotiations again.

The second question I am asked about is closing costs versus down payment and how much cash will be needed to close – this is often a confusing topic for first-time homebuyers. Down payment is the amount of the purchase price that a buyer needs to pay in cash at closing. This amount is determined with the lender and buyer directly and is part of their pre-approval. Closing costs are additional fees that a buyer incurs to buy a home. These fees can vary and it is best to be discussed with the lender to make sure a more accurate amount is given. A huge bonus to Summit Credit Union is that they offer $1,000 off closing costs for first-time buyers and Summit offers down payment options as low as 3%².

Once a first-time buyer finds a home they love, how can they make their offer as attractive as possible in this unique market?

Once a buyer has found a home that they want to write an offer on there are many strategies to making it attractive. First, finding out what the seller’s ideal closing date is and anything else that they specifically need – this is where having a good buyer’s agent can come in handy because they need to be communicating with the listing agent. Next, increasing the amount of earnest money or “good faith deposit” can show a seller that you are very serious about moving forward with the purchase. In addition to those, in previous markets buyers would ask sellers for home warranties or for the seller to pay closing costs – with our current market being so competitive I would recommend leaving those out of the initial offer. Many sellers are looking for the offer that guarantees them the most money, has the closing time frame they needed, and has fewer obstacles to get to closing. With this in mind we want to remove additional costs that we may have asked for in other markets and keep our offer as straightforward as possible. Finally, attaching the pre-approval letter from the lender is always a must so that sellers see the buyer has done their due diligence and is qualified to make the purchase.

Finally, any “secret weapons” that have been getting YOUR buyers the contract you are willing to share?

My biggest weapon is communication with the listing agent. I will always call and get as much information from them about the seller’s situation to make sure that both parties are on the same page and so that the buyer can accommodate sellers needs in their offer. This includes finding out when the seller needs to close and if they need to rent back from the Buyer for any amount of time after closing. In addition, since it would never be my recommendation to waive an inspection contingency due to the risk it can put on a buyer, I do recommend that the buyer consider covering a portion of the items found during an inspection up to a certain dollar amount or putting and individual dollar amount on the definition of “defect.” This ensures to a seller that a buyer isn’t going to look for small repairs, but is focused more on making sure the home doesn’t need large or extensive repairs. Finally, having a reputable lender that the listing agent knows will be smooth to work with is incredibly important. The team behind the buyer is incredibly important for the buyer to be successful in purchasing their dream home!

Meet Lisa Eastman, Realtor with Keller Williams

My core belief has been that you cannot be an exceptional Realtor if you’re not really listening and understanding your client’s needs and goals. I make it my goal to work with every client like they’re the only one I have, and that care and dedication carries over into every step of the buying and selling process.

Visit Lisa’s Website to View Her Listings! Get in contact with Lisa HERE if you are looking for the right seller’s agent to represent YOU in this attractive market!

Contact Summit’s Mortgage Loan Department 

Our home is likely the biggest investment that we will ever make. Get in touch with Summit Credit Union to explore your options and learn how they can be your financial partner every step of the way through the home-buying process. There is no cost to give them a call and to see what you qualify for and to see what would the most sense for you.

Visit the Summit Credit Union website
Call: 800-236-5560
Follow Summit on Facebook and Instagram!

Summit Credit Union is an Equal Housing Lender.

*The Wisconsin’s #1 Mortgage Lender designation is based on the number of loans originated in 2020, gathered from the Home Mortgage Disclosure Act data compiled annually by the Consumer Financial Protection Bureau. The results of the data were obtained through the Consumer Financial Protection Bureau’s website: LEI: 254900NTAC4H10MGSU23.

¹Offer valid for first-time homebuyers and requires a Summit Credit Union checking account. Minimum to open Free Checking account is $25. Primary Savings account required to have Free Checking. Primary Savings account: minimum to open $5. Annual Percentage Yield (APY) as of 2/1/2021 is 0.03%. An individual is to be considered a first-time homebuyer who is purchasing a property; will reside in the property as a principal residence; and has had no ownership interest (sole or joint) in a residential property in the past 3 years. This program is not eligible for: Federal VA, FHA, Rural Development, WHEDA, Investment Property and Construction loans. The offer does not apply to second mortgages, home equity lines of credit and refinance. Offer effective with purchase applications dated February 1, 2021 or later and subject to change at any time. The $1,000 closing credit cannot exceed the actual amount of the closing cost, prepaid interest and escrow reserves. This includes if the credit is combined with a seller closing cost credit. The credit will be applied at the time of the loan closing and will be reflected on the closing disclosure. Not valid with any other offers.

² Owner occupied, primary residence only. 97% maximum LTV (Loan-To-Value). Mortgage insurance premium is required and increases loan cost and monthly payment. Restrictions may apply depending on loan program selected, including: homebuyer education courses, minimum credit score, sales price limits, income limits, property restrictions, and program borrower restrictions (for example: being a first-time homebuyer or Veteran). Not all applicants will qualify.


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