4 Tips for Buying a Home in 2021


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Looking to buy this year? Here’s how to navigate a tricky housing market.

Buying a home in 2021 won’t be like buying a home in normal times. For one thing, there’s still a pandemic raging, so instead of open houses galore, you may need to use online listings and virtual tours. But that’s not the only issue you’ll grapple with. Today’s housing market is extremely tight, with supply at an all-time low. That means you might struggle to find a home you like in your price range. If you’re going to attempt to buy a home this year, be sure to employ the following tips.

1. Know your outer limit

If you take on too high a mortgage, it could cause you to fall behind on other bills and potentially land you in unhealthy debt. Once you figure out how much you want to borrow, run the numbers through this mortgage calculator. You can see what you’ll spend on principal and interest for your loan each month. Make sure you’re comfortable with that number. If you’re not, plug in a lower loan amount and work your way downward until you land on a figure you can swing. That number is your outer limit — the maximum mortgage you should take out.

2. Pay attention to property taxes

When you buy a home, you won’t just have to pay principal and interest on a mortgage every month. You’ll also be on the hook for property taxes. So be sure to find out the potential property tax bills of any homes you look at. But don’t stop there — look at each home’s property tax history, which should be available as part of its listing. That way, you’ll get a sense of how often taxes tend to go up in that neighborhood. Some towns reassess homes on a yearly basis, and if you move to a town that employs that practice, your taxes have the potential to increase annually. Granted, they could also go down if home values drop one year, but the opposite is more likely.

3. Prepare to duke it out with other buyers

Limited inventory means once you find a home you’d like to buy, you may find you’re not the only one interested. And that means you’ll need to gear up for a bidding war.

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Bidding wars are great for sellers because they generally mean someone ends up offering more than the asking price. But as a buyer, it’s the last thing you want, so do everything you can to come out victorious. That doesn’t necessarily mean making the highest offer; first try making yourself a more desirable buyer by getting pre-approved for a mortgage. A pre-approval letter shows sellers you’re a serious buyer with the means of qualifying for a home loan. That reassurance could be your ticket to having an offer accepted.

4. Don’t rush the process

Many people are eager to buy homes today because interest rates on mortgages are at historic lows. But that doesn’t mean you should push yourself to find a home immediately. Mortgage rates are likely to stay low for a while, so take the time to find a place that’s right for you and your family. If you need that extra bedroom, don’t settle for a home that doesn’t have one. If you want the option to build a playroom for your kids, don’t buy a home without a bonus room or basement. A home is probably the single largest purchase you’ll ever make, so allow yourself ample time to find the right one.

Buying a home this year is likely to be challenging. Follow these tips, and with any luck, you’ll end up with a home you enjoy and can afford with relative ease.