Tips for first-time homebuyers in Kansas City’s highly competitive housing market
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‘Priced out’
Skyrocketing home prices across Kansas City have been good for sellers, but not necessarily for buyers. And none are having a harder time than low-income and first-time buyers.
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These tips were compiled from multiple interviews with Kansas City-area homebuyers, lenders and real estate agents.
Start early: Some borrowers work for years to save up a down payment and improve credit scores. Get prequalified by several different lenders to get the best terms for you. With limited inventory, you may need additional time to house hunt, so start looking well before your anticipated move date.
Act fast: Gone are the days when you could have relatives come check out a home you’re considering buying. Speed is king in this market. Know exactly what you want so you can be prepared to put in an offer right away. Otherwise, someone else probably will beat you to it.
But remain patient: Many buyers will make offers on several homes before closing on one. Though inventory is tight, brokers say new listings are coming up all the time. So don’t get discouraged after losing out once or twice (or more).
Look low to pay high: With frequent bidding wars, buyers should be prepared to pay more than list price, particularly in the most competitive neighborhoods. So if you want to spend no more than $200,000, consider looking at homes listed at $160,000 or $170,000 to ensure you’ve got enough bidding room.
Consider less competitive markets: Johnson County, Lee’s Summit and Brookside have been hot for years, and that won’t end anytime soon. Think about looking in a less competitive neighborhood or city where you’ll get more house for your money. If you’re working remotely, consider exurbs and outskirts, where home prices are a relative bargain compared to Kansas City and its suburbs.
Don’t get swept up by the market: Don’t let this whirlwind market leave you in a home you don’t really want — or worse, one you can’t afford. Avoid pressure to waive inspection rights and carefully consider whether you want to use your own cash to pay for possible discrepancies between the sale price and the appraisal value.
Hold steady: Once you’re pre-approved, watch your credit. Don’t miss any bill payments. And don’t rack up credit card debt. As you move closer to closing, be careful not to change jobs. And never open a new line of credit, even for things like furniture and appliances, until after closing.
Put some money aside: Consider that most buyers cover all closing costs now. In addition to the usual items like furniture, new paint and ongoing maintenance costs, you’ll likely be looking at some needed repairs right away, as most homes now are selling as-is. That means sellers generally won’t make needed improvements, as was common in years past.
This story was originally published September 1, 2021 at 5:00 AM.
