Updated: Feb 8
If you have been thinking about buying a home or have already written an offer or 3 you are already well aware that the real estate market is very competitive.
And yet, it’s still a good time to buy a house. Home values are on the rise, interest rates are hovering around 3% and buying is still more affordable than renting in most cases.
Are you ready? Here are five tips that can help.
#1 Get Preapproved. This is critical in a competitive market. Not only can it give you a good price range to shop in, but how will you truly know how much house you can afford? And, ask your lender to work the numbers backwards if you find you can afford more home than you are comfortable with; determine how much you want to budget for your monthly mortgage payment (don't forget to include interest, taxes and insurance to the principal) and see what home value that would be.
#2 Sweeten the deal. Can you be flexible on your closing date? Are you willing to waive a contingency or two? Might you be willing to pay for some of the smaller costs that the seller customarily pays for out of escrow? All this might play in your favor. Sellers are looking for an easy and often fast escrow. Yet, every seller has specific issues that are important to them. Perhaps they require a rent-back to stay in their home after closing.
#3 The Deposit counts. The EMD: Earnest money deposits are “good faith” deposits that indicate how serious you are about a home purchase. A seller feels differently about a buyer offering $3,000. than one offering the full 3% on their home. (see liquidated damages clause.) A larger deposit may help your offer stand out. You may even consider an increased deposit as the escrow progresses.
#4 This is not the market to be under-bidding. Consider searching in a lower-than-maximum price range so that you have room to bid upward if necessary. For instance, you may be pre-approved for $1,00,000. and yet you will want to be looking at homes listed around $850,000. - $900,000. in order to go in stronger when you see 'the ONE!" Maxing out your budget from the start probably isn’t the best strategy with what we are seeing right now.
#5 Be patient. In the current conditions, you may not find what you’re looking for immediately. On the other hand, things could start moving quickly at any time. Your dream home is out there; communication and flexibility are key.
It's challenging to buy a house in today’s market — but that doesn’t mean it’s impossible. Reach out today if we can be your advocate and guide.