In basketball, boxing out - putting a defender's body between the basket and an opposing player, to maximize that defender's chance at rebounding the ball - is an art form.
There's a box out trend in the real estate market right now, too, and like a frustrated offensive rebounder, it's keeping younger, first-time buyers out of the homebuying game.
For first-time buyers, the real estate box out works like this - rising home prices and thinning inventories are keeping younger buyers, who traditionally have less cash to spend than older, current homeowners, walled off from the real estate market. Home prices have risen by 5.1% in the past year, according to Zillow, and going forward, should rise by 2.7% through October, 2017. Other studies indicate those prices could go higher.
Adding 8% to 10% for the price of a new home is a big problem for first-time buyers, who'll need more money for a down payment, more money for closing costs, and more money to convince lenders they're a good bet to pay off a more expensive long-term mortgage loan.
For determined first-time buyers looking for a path to a purchase, even with high prices, the secret is overcoming the problem, primarily by making their own breaks.
"There are plenty of ways for first-time buyers to get a good deal on a home," says Mark Ferguson, a real estate professional and founder of the Invest Four More real estate blog. "For example, make sure you are pre-qualified or pre-approved before you start looking. Many houses sell very fast, and if you have to wait for a pre- qualification letter, you may miss out on the deal."
Ferguson also recommends finding an "awesome" agent who can work fast. "Very experienced busy agents may not have the time to show houses and send offers in right away," he says. "I would rather have an agent who has time to focus on me, and may be newer, than an agent who knows everything, but is booked up for three days."
April Davis, a real estate investor in Minneapolis, advises newbie buyers to ditch the conventional script and use the seller's realtor to snag a property.
"Yes, there is a conflict of interest, but when you're in a market where there's the potential to have multiple offers, you want the realtor to push your offer through," Davis says. "You may even be able to negotiate to have the buyer's realtor commission come to you, depending on what state you're in and if you have an attorney to help you to process the sale."
"There are tons of ways to be notified immediately of when a property is listed, then you can contact the seller's realtor and have them show you the property and then negotiate this arrangement," she advises.
Working with an active real estate agent is a common theme among mortgage and home buying experts.
"Buyers must work with an active agent who is checking new listings every day," says Deb Tomaro, a broker associate with RE/MAX Acclaimed Properties, in Bloomington, Ind. "I get a lot of calls on my listings where buyers are obviously trying to go it alone and are too late - the house sale is already pending. Here's the problem -buyers set up automatic notifications on various national real estate websites and think they'll be notified as soon as something hits the market."
But that's not the way it works in the home purchase market, Tomaro says. "It can take a couple of days sometimes for new listings to hit all the various real estate websites out there," she notes. "Looking at your local real estate database will give you more timely info. An active realtor will be checking new listings regularly throughout the day."
Plus, a large number of transactions Tomaro worked on this past year were on homes not even listed. "Having an active realtor working for you can increase the chances a buyer gets a jump on a house before it even hits the market," she says. "The seller may be willing to cut a better deal if they don't have to mess with showings or do any sprucing up. For example, I recently had a seller planning on replacing kitchen counters and appliances, but we found a buyer before they did that. The sellers passed some of that savings on to the buyer, and we sold the house."
Looking at market conditions right now from a relative viewpoint has its financial advantages, too.
"The first rule of thumb for getting a good deal is understanding that good deals are really only discovered sometimes years after you buy a property," says Edward Kaminsky, president of SportStar Relocation, in Los Angeles.
He advocates looking at a new purchase scenario - right now - this way. "If, in fact, property prices are on the rise and you buy now and beat out the competing buyers, you may feel you have paid $10,000 too much for a home," he explains. "But when prices rise $50,000 over the next 12 months, you then realize you did get a good deal. The buyer who offered $5,000 less than the asking price trying to get a good deal now has to pay $50,000 or $60,000 a year later, because they were focused on getting a good deal the year before."
So even though prices are high, first-time homebuyers shouldn't get discouraged. With a few tricks up their sleeve, new mortgage consumers can still claim their dream house - but they're going to have to work hard for it.