St. Louis Real Estate: Do’s and Don’ts for Buyers

Livable, affordable, and friendly are some of the adjectives you want to hear when you’re in the market for a home. All of these are used when describing St. Louis and its surrounding communities. We’re biased, but we think it’s the city for the next century! Read our recent article and we think you’ll agree. 

Finding a new place to live can be both exciting and stressful. These important tips will help buyers navigate the St. Louis real estate market.

Opinions differ about the amount buyers should put down on a home, but one thing is clear—the bigger the down payment, the better. It’s never too soon to start saving for a down payment. This goes for current homeowners as well as first-time homebuyers. There’s no guarantee that the proceeds of a home sale will be enough to get you the house you want.

The more you have saved and the better your credit score, the more options you have in the St. Louis real estate market.

It might be tempting to make an offer well below the asking price. Some buyers think they might get lucky and have it accepted, or that it’s a good way to start negotiations that will eventually wear the seller down to a lower price. Either way, it can make it seem like you are not really serious about the property. 

In today’s market, bidding wars are common. An unreasonably low offer runs the risk of not being considered at all. Some owners may even be insulted and won’t warm up to the idea of negotiating any further with that particular buyer. 

When making that first offer, it’s smart to follow your real estate agent’s lead. They’re familiar with the market and can guide you on what’s fair, but still leave room for negotiation.

Once you’re sure homeownership is right for you, start to research mortgage lenders. Get prequalification or preapproval documents before you start shopping for St. Louis real estate. This will help you understand how much you can afford so you can narrow down your search. It will also demonstrate to real estate agents that you’re serious and ready to buy, instead of “just looking.”

A buyer can get prequalified for a loan by sharing some financial information with a lender. The lender then gives an estimate of what loan amount the buyer should be able to get. In many cases, the prequalified amount is a ballpark number.

Preapproval, on the other hand, is a bit more involved and the results are more official. The lender runs a credit check and does a thorough examination of the buyer’s financial records. The buyer comes away with a concrete approved loan amount, interest rate, and monthly payment. 

St. Louis has a vast array of neighborhoods to fit any lifestyle and budget. Narrowing down a search can be frustrating and time-consuming. Some people are anxious to speed up the process and talk themselves into loving the first place that checks most of their boxes. Others truly do fall for something they see early in their search. Either way, it’s a good idea to slow down and take a breath. 

Love at first sight can have buyers overlooking major flaws and red flags. Even if the house is nearly perfect, there may be something out there even bigger, better, or for a lower price. Emotions definitely play a part in a home search. Buyers need to beware that they don’t let their feelings overrule their practicality and common sense.

A preapproval can reveal the amount you can afford for a monthly mortgage payment, but other costs of homeownership must be considered too. Taxes, insurance, utilities, and HOA fees for a new home might be considerably higher than someone is used to paying with their old house. 

Even when a buyer falls in love with a house, it’s not unusual to have a to-do list of renovations and repairs. This is especially true if the buyer has gotten a good deal by agreeing to accept some flaws. Those costs must fit into the monthly budget, as they can quickly eat away at any savings from getting the house at a bargain price.

There are a lot of beautiful houses in St. Louis and it’s easy to fall in love at first sight. But remember the old adage that beauty is only skin deep. Buyers need to keep their eyes open for what could be lurking beneath the bright, shiny surface.

Make sure the house is structurally sound and insist on the proper inspections. Check the basement for leaks and mold. Basements and foundations can be a particular problem in many older homes in St. Louis. Mature trees can make a street gorgeous, but their branches can damage roofs and their roots can crack sidewalks and sewer lines. Old homes might have outdated plumbing or old-fashioned knob and tube wiring. 

These things don’t need to be deal-breakers. You may have found your dream house. But you do need to know what you’re getting into and how it could cost you in the future.

While you need to be aware of hidden flaws, it’s also best to keep an open mind when touring houses in St. Louis. In many cases, a coat of paint or some new landscaping can transform the ugly-duckling house into a swan. And with some time and effort, bigger changes can be made to flooring, fixtures, appliances, and even floor plans to make the house more to your taste.

Focus on the value and “bones” of the home and look for its hidden potential. Know what can be changed quickly and inexpensively and plan to do those first. Then make a plan for the rest. It’s better to buy something boring or not your taste and put your own stamp on it, rather than a pretty house that’s falling apart. 

It’s easy to get excited about a house and throw all thoughts of budgets and goals out the window. It’s important to remember things like how much work you’re willing to do, how much time you want to spend fixing up a home, and most importantly what you can afford.

Avoid getting in a bidding war and buying something beyond your means. Sometimes the budget can be stretched a bit, but often, it’s best to walk away and keep looking. Listen to your agent’s advice on what a home is actually worth and how much you should offer.

On the flip side, be cautious about falling in love with a home in foreclosure. A super low price could feel too good to pass up. But these homes can be neglected and need a lot of work. You could also be competing with house flippers. Buying a foreclosed home can be complicated for an inexperienced buyer and should be approached with caution. 

When viewing homes, ask if the neighborhood is part of a special housing district. St. Louis city has several historic districts that include houses and landmarks of national, state, and local significance. 

City ordinances often dictate rehabilitation guidelines and set design standards in these areas. Homeowners may have strict rules to follow, especially when it comes to the exterior of the building. Buying a home in a special district may be a point of pride, but it usually comes with additional responsibilities and concerns.

Negotiating is a collaborative process, so you’ll want to make your bid based on the advice of your St. Louis real estate professional. Let them do the communicating with the seller, and don’t ever try to do a deal behind their back. There’s a reason why agents charge a commission. Negotiation is an art and it’s best to let a pro handle it.

You may find a house that’s For Sale By Owner. Just because the homeowner has decided to handle the sale themselves does not mean that the buyer must go the same route. Not only is it perfectly acceptable to get a buyer’s agent, we highly recommend it. A real estate agent may think of things you didn’t even know you needed to do or ask. They will make sure everything happens in a timely manner and by the book. Best of all, you probably won’t have to pay your agent’s commission. The seller is typically responsible for all commissions at closing.

Berkshire Hathaway HomeServices Select Properties is locally owned and operated and is one of the best. Our agents are constantly ranking at the top of nearly every local and national list for real estate professional goals. We’ve been named by the St. Louis Business Journal as one of the top places to work in St. Louis for the seventh straight year in 2020—a testament to how much our agents love their jobs.

One of the best decisions a homebuyer can make is hiring a buyer’s agent who knows St. Louis real estate. You need an agent who will be with you every step of the way to help get you in your new home.