If buying a home was one of your goals this year but the calendar is already heading toward the holidays, you might be wondering if you've waited too long.
Is there still time to buy a home in Iowa before the end of the year?
Depending on your situation, absolutely.
Homes are bought and sold throughout the year, and you don't necessarily need to wait for the spring market just because summer is over. But if you'd like to have keys in hand before December 31, there are a few things you should know about the process, your timeline and buying during the fall and winter months.
Start With a Mortgage Pre-Approval
Before you spend your evenings scrolling through listings, talk with a mortgage lender.
Getting pre-approved can help you understand:
How much you may qualify to borrow
What monthly payment you're comfortable with
How much you may need for a down payment
Estimated closing costs
Which loan programs may be available to you
It also puts you in a much better position once you find a home you want to buy. Many Iowa sellers will want to see that a financed buyer is pre-approved when considering an offer.
If your goal is to close before the end of the year, getting your financing in order early is especially important.
You Don't Necessarily Need 20% Down
One misconception that keeps some potential buyers on the sidelines is believing they need a 20% down payment before they can purchase a home.
Depending on the mortgage program and your qualifications, your required down payment may be considerably less.
Iowa also has homeownership programs that some buyers may qualify for. The Iowa Finance Authority currently offers programs for both first-time and repeat Iowa homebuyers, as well as down payment and closing-cost assistance options for eligible buyers.
Talk with a qualified lender about your specific situation rather than assuming you aren't ready to buy.
Know What You're Looking For Before You Start
When you're working toward a year-end deadline, knowing what matters most can make your home search much easier.
Before you begin touring homes, think about your must-haves versus your nice-to-haves.
Consider:
Your preferred location
Price range
Number of bedrooms and bathrooms
Garage needs
Yard size
Commute
School district, if relevant to your household
New construction versus an existing home
How much updating or maintenance you're comfortable taking on
If you're looking in Central Iowa, you may also want to compare communities rather than limiting yourself to one city.
For example, a buyer considering Ankeny might also explore Polk City, Huxley, Ames, Elkhart or other communities depending on their commute, budget and lifestyle.
Fall and Winter Can Be Different From the Spring Market
The real estate market doesn't shut down when temperatures drop.
There may be fewer homes coming onto the market compared with the busy spring season, which can mean fewer options for buyers.
But there may also be fewer buyers actively searching.
Sellers who list during the final months of the year may have a specific reason for moving, such as a relocation, job change, new construction completion or another home purchase.
That doesn't automatically mean a seller will negotiate heavily, but it can make understanding the seller's priorities particularly valuable.
Sometimes the strongest offer isn't simply the one with the highest price. Closing date, possession and other terms can matter too.
Once You Find a Home, There's Still Work to Do
Finding the house is exciting, but an accepted offer isn't the end of the buying process.
Depending on the property, financing and terms of your purchase agreement, the period between an accepted offer and closing can involve several steps.
These may include:
Home inspection
Negotiating inspection-related items
Appraisal
Finalizing your mortgage
Underwriting
Securing homeowners insurance
Reviewing title-related matters
Final walkthrough
Closing
Iowa HHS outlines pre-approval, home shopping, making an offer, mortgage approval, inspections and closing among the major steps in the home-buying process.
That's why you shouldn't assume you can start looking in late December and automatically close before December 31.
If being in your new home before the end of the year matters to you, tell your agent and lender that upfront so everyone understands your goal.
Don't Skip the Home Inspection Just Because You're in a Hurry
A deadline shouldn't cause you to rush one of the biggest purchases you'll make.
A home inspection can help you learn more about the condition of the property and identify issues you may not notice during a showing. Iowa's People's Law Library notes that sellers disclose problems they know about, but there can still be issues they don't know exist—which is one reason an inspection contingency can be valuable.
Depending on the property, buyers may also consider additional inspections or testing.
In Iowa, one that deserves particular attention is radon testing. Iowa HHS recommends testing homes for radon when buying or selling.
Your real estate agent can help you understand the inspection options available to you and the deadlines outlined in your purchase agreement.
Pay Attention to What You Can Learn About a Home in Cold Weather
Buying later in the year can give you a different perspective on a house.
When touring an Iowa home in cooler weather, pay attention to:
How comfortable different rooms feel
Drafts around doors and windows
The age and condition of the furnace
Snow and ice accumulation, if applicable
Gutters and drainage
How much natural light the home receives during shorter days
The condition of the driveway and sidewalks
How the neighborhood looks outside of spring and summer
If snow is already on the ground, remember that some exterior features may be harder to evaluate. Ask questions and review available information about anything you can't easily see.
Budget for More Than Your Down Payment
Your down payment isn't the only money you'll need to think about.
Talk with your lender about estimated closing costs and how much cash you should expect to need at closing.
Then think about the expenses that come after you get the keys.
You may need money for:
Moving expenses
Furniture
Appliances
Immediate repairs or improvements
Utility setup
Home maintenance
Snow removal equipment
Higher utility bills
An emergency fund for unexpected repairs
Property taxes and homeowners insurance should also be part of your overall housing budget.
In Iowa, property taxes are typically prorated as part of a real estate transaction, and your settlement statement should show how taxes were handled at closing.
Don't Make Major Financial Changes Before Closing
Once you're under contract, avoid making significant changes to your finances without talking to your lender first.
This isn't the time to finance an entire house worth of new furniture, open several new credit cards, switch jobs without discussing it with your lender or make another major purchase.
Your lender may continue verifying financial information before closing.
If you're unsure whether a financial decision could affect your mortgage approval, ask your lender before making it.
Waiting a few weeks to buy the new couch is a lot easier than creating a problem with your home loan.
What If You're a First-Time Homebuyer?
If this will be your first home, don't assume the process is out of reach because you don't have a huge down payment saved.
Ask your lender whether you may qualify for any first-time homebuyer programs.
For example, Iowa's FirstHome program currently offers eligible first-time buyers access to mortgage financing and potential down payment and closing-cost assistance. Program requirements apply, so a participating lender can help determine whether you qualify.
Even if you aren't ready to purchase immediately, talking with a lender now can help you understand what steps you need to take to get there.
Is Buying Before the End of the Year Right for You?
Just because you can buy a home before December 31 doesn't mean you need to.
You shouldn't rush into a home that doesn't fit your needs simply to meet an arbitrary deadline.
Buying before year-end may make sense if:
You're financially prepared.
You're comfortable with your monthly payment.
You plan to stay in the area.
You've found a home that fits your needs.
You're ready for the responsibilities of homeownership.
Moving now works better for your personal situation than waiting.
On the other hand, if you need more time to save, improve your finances or figure out where you want to live, there's nothing wrong with preparing now and purchasing later.
Thinking About Buying a Home in Ankeny or Central Iowa?
If you'd like to purchase a home before the end of the year, now is the time to get the process started.
Begin by talking with a lender and getting pre-approved. Then, work with a real estate agent to determine what you're looking for, understand what's available and start touring homes.
The Hokel Real Estate Team helps buyers throughout Ankeny, Ames, Huxley, Polk City and the surrounding Des Moines metro navigate the home-buying process from the first conversation through closing.
Whether you're hoping to have keys before the holidays or you're just starting to plan for your next move, we can help you figure out what makes sense for your timeline.
Ready to start your home search? Contact the Hokel Real Estate Team to talk about buying a home in Central Iowa.