Interest rates are on the rise and home inventory is crazy low, which means there are currently more buyers than sellers at the moment. So how can you find and purchase your dream home in today’s competitive seller’s market? You absolutely can get what you want, but you need to bring your “A” game and be decisive.
These six tips can help put you in the best position to get your offer accepted:
1. Get Pre-Approved
You might know that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio, and your high credit score — but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be prequalified from a lender.
This process involves submitting a mortgage application, complete with providing verifying documents. The pre-approval letter is usually good for up to 90 days and can tell you how much money a lender is willing to let you borrow which can help you in your search.
2. Make a Dream House List
Sitting down to make and prioritize a list of your wants and needs can help you decide in advance which features you can and can’t live without, such as number of bedrooms, commute time or willingness to make home improvements. Knowing where you’re not willing to compromise will help you zero in on the right homes to view.
3. Schedule Tours ASAP
Listings are moving fast in this seller’s market. By utilizing free home tour scheduling companies, like HomeTraq, you can quickly schedule on-demand showings of homes for sale on your time. In the same way you use Uber or Lyft to quickly find a driver to get a ride, you can use HomeTraq to quickly schedule a showing (both in-person or virtually) with confirmation in an average of 3-5 minutes. Request a showing today!
4. Make Your Best Offer First
The motivation to buy what we want for as little money as possible is deeply engrained in us. So when most people see the listing price of a home, they naturally wonder what they can really get it for. Offering lower than asking price is a reasonable strategy, especially if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best tactic.
Consider offering above asking price if you have your heart set on a specific house, but make sure it’s an offer you can comfortably afford. Keep in mind that mortgage loans are based on a home’s appraisal. If your accepted offer is above the home’s appraised amount, you’ll have to make up the difference with your own out-of-pocket funds.
5. Prepare Yourself for a Bidding War
If there is ever a time when a bidding war could be imminent, it’s during a seller’s market. No buyer wants to be involved in such a battle for fear of possibly going over budget. You need to make sure you set your search below your max budget to leave room in case of an over-asking bidding war.
6. Be Flexible
If you’re unable to find what you’re looking for now, consider building a new home versus buying an existing one. Be open to new locations, too, especially if you work remotely. Finally, consider putting your home search on hold for a few months or shopping for a home during off-peak seasons, like the fall or around the holidays.
While it may be more challenging to find the home of your dreams in a seller’s market, it is possible with planning and preparation. For more information about mortgages and the pre-approval process, schedule a free mortgage consultation with our mortgage team to learn about your mortgage options.