While there seems to be an abundance of buyers there is not an abundance of homes on the market at this time. The National Association of REALTORS’ recent pending home sales report shows that fall sales have leveled off as buyers scramble to find a decreasing amount of available homes for sale in addition to fast-rising prices in some markets.
A few tips that could help you get the home of your choice while the inventory is low.
Get pre-approved not just pre-qualified. There is a difference. A pre-qualification is when a lender discusses a buyer’s credit, income and assets with them. A pre-approval is when a lender actually runs a buyer’s credit and verifies their income and assets, this is considered a solid start to the home-buying process.
By also getting pre-approved you know beforehand how much house you can afford, check and repair your credit, do not make any major purchases, have a down-payment amount available. This becomes important during the underwriting process when a new large debt or an unforeseen monthly expense can change your loan-to-debt ratio and can potentially derail a contract. Once you get pre-approved don’t make any major purchases until after your home closes.
Hire a real estate professional. A good agent will help you to not only locate a property, but will advise you on the status of the current market, assist you in attaining as many of your needs as possible while dealing with the realities of the market place and/or financial constraints. Agents also handle the ins and outs of negotiations, which includes preparing all the necessary forms when making an offer and/or counteroffer.
Be available and prepared to make fast decisions. Respond quickly to questions about your offer. Indecisiveness or not being available can make you miss a potentially good deal.
Home features you ‘must have’ vs. ‘great-to-have’ features. You are not going to find “all” the features you want in a home. Determine which features are required to make the deal as opposed to those that you’d like. Knowing what you can and cannot live with helps make the search and offer process smoother.
Determine what contingencies you are willing to eliminate from your offer. Sometime contingencies can make or break a deal. This could help you remain competitive with other potential buyers.
Money speaks loud make your best offer up front; this may be your only chance to negotiate further. Keep in mind if you’re looking to purchase in an area where inventory is low, you should be prepared to give a full price offer.
Have your realtor check for ‘withdrawn’ and ‘expired’ listings. Many of these may have not sold because they were deemed overpriced at the time. If your agent were to send a letter to the owner expressing your interest in the property and that you’re serious, you may get a response.
Don’t overlook rental listings. The owner may have had to move because of a job transfer or other life change and didn’t have time to list it for sale. Go see the home and if you like it, ask the owner if he or she would be open to selling.
Don’t run from overpriced listings. Most sellers won’t list their home at a lower price, but would sell it at a lower price. It would be better to go in with an offer before the first price reduction because competition will increase when other buyers take notice of a price reduction.