If we can say one thing about the housing market for the past few years it’s that it’s a seller’s market for sure! Homes are selling almost as quickly as they are placed on the market. On average, you may be looking at a maximum of three weeks until receiving an offer. It’s often far less than that. This can lead to some frustration for buyers, particularly if you need to find a new place to live quickly. Here are a few tips for buying a home in an ultra-competitive market.
Get pre-approved
The biggest mistake you can make in today’s market is to start home shopping without an approval letter from your mortgage lender. However, there’s something you need to understand as a buyer. There is a difference between pre-qualification and pre-approval.
Pre-qualification only shows how much house you can buy based on your current income. Pre-approval means your lender has done a complete credit check and looked into your expenses to determine how much mortgage you can afford per their underwriting guidelines. Agents selling homes will know that if you only hold a pre-qualification letter, you may have other debts your lender is not aware of yet. Submitting a pre-approval letter shows you are a serious buyer and can immediately afford the offer you are making.
Make a strong offer
When the housing market is not as competitive, buyers can get away with making offers that are below the asking price. However, in a hot market where bidding wars are the norm, you must think more strategically. If you offer anything more than ten percent below the asking price, plan on being rejected – especially in this market. You will quickly discover that you will need to offer at least the asking price, if not slightly more, to land that dream home.
Make your best possible down payment
Sellers historically are more inclined to accept an offer from a buyer with a larger down payment. The main reason is that it makes the seller feel more confident that you can secure the mortgage needed to complete the sale. However, gathering funds for a down payment can be a challenge. Thankfully there are numerous programs available to help, and you do not have to be low-income to qualify.
Look for diamonds in the rough
The best way to ensure you land a home in this market is to look for something that may need a little work. Look past the flaws and shortcomings and realize that you have time to make this home yours. If you are a handyman and can do the work yourself, even better!
If you are looking for an edge in this ultra-competitive market, you need a realtor you can trust! Call me at 717-253-3259 (cellphone) or visit my website at www.karentavenner.com and let’s get started on your next house-hunting adventure.