As I come back to refresh this post in 2022 some things have barely changed in the last 5 years. We are now transitioning to a little more balanced market but most of this is still very true.
2017 has turned home buying into somewhat of a challenge for the average buyer. Here are a few ideas to start making your life a little simpler and give you some ideas of how to actually win that home!
1. Of course the absolute most important is having your financing in order! That means you’ve already seen A lender, you already have your pre-qualified letter in hand and if they could have run you through underwriting and have you pre-approved you have already done that also. You know exactly how much money you can spend and you are very happy with what the payment will be. In the middle of quick negotiations, you need to be sure that you are good with the payment. This is not the time to be worrying about that.
2. These are things you will need to know off the top of your head. How much down payment do I have? And do I have the cash for my closing costs or do I need the seller to pay those? If you need the seller’s assistance with closing costs that’s fine. You are not going to be as competitive though so you may have to try for a few homes before you actually win one. Every concession you need – the more patience you’re going to need to go with it.
What am I looking for? what type of home do I need? What size do I need? What can I live with, and what can I live without?
You’re not going to have a lot of time to make a decision as you come across these homes. Sometimes you’re going to have to make a split-second decision and you’re going to be in a competitive bidding war so you want to make sure that you’re aware and happy with the things that you can live with and that you can’t live with. Put a value on them also if you can. Really rate them so you are prepared and confident with a fast choice. Make sure if you’re a couple that you are on the same page over these.Get them discussed ahead of time.
My experience this year for my listings is having multiple offers in hand usually within 12 hours or less of listing the home. So be prepared to drop everything and run to look at a house. If you are prepared and have really discussed that list you may be comfortable with just one of you looking at the house. Consider it if one of you is not super flexible in your schedule.
One of the other things you’re going to want to take into consideration is how handy am I. What can I repair? What can I fix? Who do I have that can help me fix this because sometimes taking on some repairs yourself can be a good bargaining chip when it comes down to negotiating with the sellers. Sellers are the happiest doing nothing. And in a seller’s market, they get away with doing less than they should because it is so competitive.
Patience is the name of the game. No getting attached to any home that you’re walking through until it’s actually yours. Until you have an accepted offer in your hand no attachment. You may have to make an offer on several homes before you win one. I know that sounds a little tough because you wouldn’t make an offer if you couldn’t see yourself living there. I get that! You’re setting yourself up for a huge disappointment though if you start dreaming about it too soon.
One thing I can tell you as a constellation prize. I have yet to see someone lose out on a home and not eventually end up in a home that they love more. I know that sounds hard to believe when your dream home gets sold out from under you but in all the years I have sold homes it has always worked out to be a far better situation in the long run. I could get religious on you here but I won’t. Just trust and have faith!
One thing about a seller’s market is everything takes more time than you anticipate. That can be a real problem if you are in a rental. Your best bet is to flip your lease into a month-to-month.I know some landlords don’t like doing that. If that is a big no with your landlord option B is having someone you can crash with for a while. Parent, family, friend.
Otherwise, you may want to start shopping 5 or 6 months prior to your lease coming due. That may leave you in a position where you have 2 payments for a month or so if you get lucky and find a dream home right off the bat.That is a gamble. But if you figure 60 days to finance your dream home after you find it.Remember you won’t have a house payment on the new home for almost 45 days after it closes. That really only sticks you with a month of double payments if you were so lucky to win a home early.
After you have prepared – remember the seller is going to be seeking the most attractive offer they can get. That includes the most money, the least amount of repair for them, (someone taking home as is) very attractive if the seller knows they are not going to get beat up in the home inspection,And any other perk that is attractive to that seller. Maybe staying in the home longer, quicker close. A lot just depends on what is important to that seller.
The more attractive you can make your offer and your presentation the quicker and easier it’s going to come together for you. Of course, the cash buyer is almost always going to win over someone who’s financing but do your homework get the things done that you need to get done and it will come into place for you.And most important line up with an agent that understands this market. And listen to them. Patience and speed are key for a buyer in a seller’s market.
What type of home loan do I need?