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Tips for buyers in a tight market

By
Real Estate Agent with RG Realty Group

When inventory is low, home prices tend to go up. Attempting to purchase a house in this type of market can make the already complex process of buying a home even more overwhelming. To help buyers successfully get through the buying process in a tight inventory market with as little stress and difficulty as possible, the National Association of Realtors® has these five suggestions and an infographic:

 

  1. Determine and stick to a budget. Before beginning the house hunting process, prospective homebuyers should receive preapproval from one or more lenders to verify the amount of money they are qualified to borrow. Then, after taking into account additional costs of ownership such as taxes, utilities and insurance, buyers should determine a final budget they can comfortably afford. When listings are scarce, bidding wars can drive up prices, so buyers must be prepared to walk away if the asking price surpasses their budget.
  2. Identify desired neighborhoods and home wants versus needs. When housing inventory is tight, buyers may need to compromise on what they believe they want from a home. Certain wants, such as stainless appliances or hardwood floors, can be added later. However, if a buyer wants to be in a specific school district or have a decent sized backyard, those cannot be addressed later and must be taken into account during the house hunting process.
  3. Be ready to make a decision quickly. In a seller's market, homes rarely stay on the market long, so when a house that is in their budget and checks off all of their needs come along, buyers should not hesitate. Buyers should be ready to submit an offer quickly, or they may risk missing out on the home altogether.
  4. Bid competitively and limit contingencies. It is tempting to submit a low offer as a starting bid, but in a seller's market buyers need to put forward their highest offer from the very beginning or they are likely to lose out on the home. It is also important to remember that in multiple bidding situations it is not always the highest offer that is most attractive to the seller but the one with the fewest contingencies. Removing restrictions related to the sale of a current home and being flexible with things like the move-in date can make a bid stand out to a seller.
  5. Work with a Realtor® ( Like Tim L RAMEY).All real estate is local, so it is important to work with an agent who is a Realtor®, a member of the National Association of Realtors®, and who is familiar with the areas and neighborhoods the homebuyers are considering. Realtors® are the most trusted resource for real estate information and have unparalleled knowledge of their communities; they can give buyers the competitive advantage needed in a tight market.  

Comments (3)

Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Tim - being prepared and staying realistic (and a bit flexible too) is good.  But no one ever promised it will be easy.  Especially when real estate is involved.  

Jan 20, 2022 05:36 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

These are good tips for buyers -  I totally agree about limiting contingencies when possible.

Jan 20, 2022 05:43 AM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

All valid points for sure. The difficult part is with the shortage of homes and multiple bid situations for buyers with a loan and the appraisals becoming an issue. The lower down payment buyers have a disadvantage. Ask your Realtor for advice and also ask about free grants and don't forget the bank of Mom and Dad.

Jan 20, 2022 08:45 PM