In many neighborhoods, it's a seller's market. This means prices are high and demand is even higher, so what can you do to score a nice home without overpaying for it?
#1 Know What You Want
Houses sell fast in a seller's market, which is why you need to be very clear on what you want in your home. Not only will this make life easier for your real estate agent, it will also enable you to narrow your search down to houses that really fit your needs. When you find a house you really like, check it against your list of must-haves and wants and, if it fits, make the leap sooner rather than later.
Sitting around on a home that you like in a seller's market is going to lead to it being swiped out from under you! Be prepared to make an offer right away when you see a home you may want to purchase.
#3 Get Pre-Approved
Being pre-approved will allow you to walk into the housing market with realistic expectations of how much money a lender is willing to give you. The pre-approval process will review your credit and income ahead of time and verify your application's information to ensure you know how much of a house you can buy. You may even be able to lock in an interest rate during the pre-approval process.
The pre-approval process will also allow you to skip the "contingent on financing" clause of your offer. In a seller's market, this is a big deal! A seller would much rather work with a buyer who does not have this clause in their offer than one who does. A buyer who makes their offer contingent on financing may waste weeks of the seller's time while the house is in "Pending status" as they try to attain the financing (with a pre-approval, you're 90% there to the finish line).
#3 Know Your Limits
You should already be pre-approved and pre-qualified before you begin your housing search, and this will give you an idea of how much a lender is willing to give you on a home once you find one. However, you need to have your own limits in mind. Don't just think about how big of a mortgage the lender will give, think about on-going payments, down payment, and closing costs.
With those numbers calculated, you'll be able to know how much you are willing and able to spend on a home before you get caught up in a negotiation session with a seller.
#4 Be Considerate
The seller may be busy with other potential buyers and they likely also are stressed out by the moving process. They may be searching for their next house while trying to sell their own and potentially even preparing to relocate very far away. Meanwhile, they may also be working a full-time job and managing their family.
While you are certainly busy, excited, and anxious as well to be buying your first house, remember that it's a seller's market. Be willing to work on their schedule. This means ask follow-up questions via text or email so you don't hold them up on the phone (unless they offer to call) and meet with them at a time that works for them.
#5 Flaunt Your Money
Yes, in a seller's market, now is the time to pull out all stops and try to show a seller that you are serious and ready to purchase. This means flaunting the money you have available through an earnest money deposit that goes along with your offer and also the biggest down payment you can muster. All of this will show a seller that you are in the game and ready to buy the second they say "Yes!" to the deal.
We can get you pre-approved for a loan in a timely manner at Horizon Lending Services. Contact us for more details on your available options and find which options best meets your needs.