So You Want to Buy a House in 2021? Here Are 6 Things to Know First

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The coronavirus pandemic has caused seismic shifts in the real estate market, spurring a higher demand for more square footage and thus a sudden interest in the spacious suburbs. Interest rates are low, but so too is inventory.

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Here are six things aspiring homebuyers should know about the 2021 real estate market.

1. First time buyers could get a tax credit under Biden’s plan

A key aspect in President Joe Biden’s housing plan is to increase homeownership by providing up to $15,000 in down payment assistance to first-time buyers. 

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The credit could help remove a major barrier to homeownership as many millennials—saddled with student loan debt and sky-high rent payments—have cited saving for a down payment as the insurmountable challenge that keeps homeownership out of their reach. 

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2. Homebuying will become even more competitive

It’s more critical than ever to position yourself as a qualified buyer by getting prequalified and having necessary documents available, so when that right property comes along, you can make a quick offer.

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Escalation clauses can be an ace in your pocket to help you win a bid. This clause allows you, the buyer, to pay a certain amount of money above the highest offer the seller receives and often comes with a cap to protect you from entering a deal you can’t afford. 

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3. Prices will hit a new high

If you’re willing to wait until later in the year to buy, you may see inventory ease. The tradeoff, though, is you can expect to see slightly higher mortgage interest rates.

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Real estate experts encourage buyers to explore first-time buyer grants. You can see what grants you might qualify for by checking with your state’s housing finance agency.

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4. The suburbs will still be hot

Ample square footage is high on the priority list of many buyers, prompting a suburban migration.

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Within 25 miles of the urban cores of the largest metros, house hunters can find homes with 25 to 65 percent more square footage for the same price as a home closer to downtown. 

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5. Bigger homes, homes offices, and more bedrooms will top buyer wish lists

Work with an experienced agent who knows the area where you’re looking to buy to help you get an edge.

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You might also consider opting for a new or custom build, or a renovation, to help you incorporate the features you want most in a home.

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6. Intergenerational living will start shaping the way we build homes

Homebuyers are looking for that garage that has been converted to an in-law suite, or a bonus room they can turn into an extra bedroom.

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A home improvement project could help make multigenerational living possible and comfortable.

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