How To Buy A Home In 2021

Do you want to buy a home in 2021? Maybe get a larger or smaller one? You cannot beat the current interest rates. If you haven’t calculated your payment with a low interest rate, it’s worth looking at. See our calculator in the menu under buyer.

The real estate market has changed this year, and depending on your price range and which city you live in, you may need to adjust your strategies just to be able to buy a home. It’s all about “Supply and Demand.” Did you know that 3 factors are driving up home prices across the country right now? Buying a home can be daunting, but it’s entirely possible if you’re creative and strategic with your offers.

Why Have Home Prices Gone Up?

3 Factors For Our “Seller’s Market” Are:

1. Lack of Inventory. There is a lack of people selling their homes right now. Moving is never fun, but moving during Covid can be scary and deemed unnecessary. A seller has to not only show their home, but they also have to find a new place to live.

2. Lumber Shortage. Most people are not aware of the lumber shortage the U.S. is experiencing. Here’s the short version of the situation; In 2020, when lockdown began, logging and sawmills shut down for about 3 months. During that time, DIY home improvement projects skyrocketed. Big box stores (Home Depot and Lowe’s) had their lumber sales soar 50-90% each month. They depleted the lumber market reserves.

3. Interest Rates. Interest rates hovering just above and just below 3% is amazing! If you don’t own a house, buy a home! If you’re an investor, interest rates are 3.5-4.0%. Rental homes are needed! In Nevada, rentals home rents are lower than house payments. A $350,000 house rents for $1400 and up. Do the math. That amount of cash in the bank will get you around $100 a month in interest vs. $1400 – $1600 for rent. This is another reason why homes are being sold so quickly.

As the country reopened, experts predicted that the housing market would collapse, so lumber production was reduced. The market didn’t collapse, and demand for new construction homes went up because the resale inventory went down. And, of course, the stock market and commodity market got in the equation.

Due to this projected shortage, large builders (some who own mills in a subsidiary company) started hoarding wood, creating a lumber shortage for the average home builder. This forced up prices as companies scrambled for supplies. The average price for wood across America in the last year has increased a builder’s cost by $24,000 per house.

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Buying A House? How To Fight The Competition

If you want to buy a house, below are 3 ways to beat the competition who also wants to buy a house. We are in an extremely competitive housing market with high home prices, and prices are still going up. Some states in the US have appreciated over 40%. Give yourself the best odds for buying the house that you want, where you want it, for a price you can afford.

Be Prepared- Plan Ahead

1. Be prepared. If you are paying cash, present proof of funds with all offers. If financing, have your loan qualifying finished. If you are fully loan approved (not just pre-qualified), you have a much stronger position when making an offer on a home. Remember that your competition may be a cash buyer.


A.  Turn in all loan qualifying paperwork NOW. See our loan paperwork checklist that is applicable across the country. You’ll want to use a well-known local lender, because the listing agent may know them or their reputation.

B.  Once you are fully loan approved, don’t buy a car, furniture, appliances, or a vacation – this can change your financial situation risking your home.

C.  Online lenders and banks may take longer than local lenders to complete and process loans. Don’t risk using them in this market! If you close even one day late, you can lose your house and earnest money. You’d be in breach of contract, and the seller could keep your earnest money, and often re-sell the home for much more money. In 2005-2006, people waited for this to happen.

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Write The Sellers A Letter

2. Have a pre-written letter about you and your family to present with all offers. You’ll want to tell them who you are and what your job/jobs are. Tell them about your family and pets (using their names and ages). Add something emotional about you or your children.

Modify your letter for each house you make an offer on. Tell them what you like about their home and why their home is perfect for you. If there’s something you like that was homemade or even the paint color, compliment it.  Include why this location is desired.

Make Your Offers “Highest and Best”

3. Only make an offer that is the highest amount of money you are willing to pay for a home. Write the best and cleanest offer you can write. Do not clutter your offer by asking for them to pay for things. To keep up with a cash buyer, write your offer where you’ll pay for all of your own loan costs, including the appraisal and possibly the home warranty. Eliminating that $300-$500 expense sounds good to a seller and may put your offer in the first position.

Keep in mind that homes are rapidly appreciating. Offering $5,000 over list price can be made up in appreciation when you close in a month.

Do Not Make An Offer Contingent On A Home Closing

4. Do not try to buy a home with an offer contingent on the closing of your home. Lenders can be creative- take advantage of this. We had a client get a 70-25-5% loan. 70% was the long-term loan amount at 3% interest. 25% was the second trust deed that they would pay off with their existing home’s equity. It had a 5% interest rate. The final 5% was for a HELOC (home equity line of credit) to cover moving expenses and two house payments if needed. They paid off the second two weeks later and never used any of the HELOC.

A. if your existing home closes before your new home purchase, cancel the smaller loans.

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Accommodate The Seller

5. Make the closing date about what the seller needs. Ask the seller when they want to move and accommodate their goals. Give the seller a couple of extra days to vacate and professionally clean the home after closing- at your expense.

If you are selling your home, add a “per day rent back” dollar amount option. Extend this courtesy to the seller. If you are currently renting, your lease should have an established “per day” charge if you don’t vacate as agreed. Use this to buy a home.

We hope these items will help you buy a home in this challenging market. Knowledge may be the key to achieve your goals and for you to buy a home you want. As always, use a Realtor that can and will protect you. Experience is a huge factor, and in this market, you’ll want a Realtor who was established prior to the similar 2005-2007 housing boom.

This blog was written by Kurt Grosse with Realty One Group In Las Vegas. Kurt is a 25-year top-producing Realtor and a former Nevada Building Engineer (PE, CE). He monitors the construction of your new home as it’s being built. In resales, he looks out for you by pointing out flaws. Find a Realtor who will protect you. Call Kurt today for a referral or a housing consultation – 702-750-7599

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