Today’s Home Buyer
With inventories tight across many markets, home buyers are facing increased competition as they fight to snap up the limited number of homes available.
“Attempting to purchase a house in this type of market can make the already complex process of buying a home even more overwhelming,” the National Association of Realtors said in a recent release.
Here are a number of suggestions for home buyers looking to navigate today’s extremely competitive market:
CREATE A BUDGET AND STICK TO IT
Buyers should get pre-approved by one or more lenders to ensure no delays. In addition, budgeting also means taking into account the additional costs such as taxes, utilities, and insurance. Buyers should be aware that when listings are scarce the possibility of a bidding war becomes much higher, which means they should be prepared to walk in the event the bidding exceeds their budget.
IDENTIFY YOUR WANTS VERSUS NEEDS
Wish lists might need to be compromised if the competition is too intense. For example, you might want a stainless appliance or hardwood flooring, but do you really need it? These can always be added later if you choose too.
However, if a buyer wants to be in a specific school district or have a specifically sized backyard, those cannot be addressed later and must be taken into account during the house-hunting process.
Properties in good condition and priced appropriately rarely stay on the market for long when things are so competitive. Therefore, buyers need to learn not to hesitate if they find a house that suits their needs.
MAKE SURE YOUR OFFER IS COMPETITIVE
In a seller’s market, a lowball offer just won’t work. As such buyers should go ahead and make their best offer right away or risk losing out. Still, when multiple bidders are competing for the same property the highest bid may not always win, but bids with fewer contingencies will surely be very attractive.
Removing restrictions related to the sale of a current home and offering flexibility with things like the possession date can make a bid stand out to a seller.
USE A REALTOR
I urge buyers to work with a real estate professional. Take full advantage of a trusted resource for real estate information and have unparalleled knowledge of communities and the processes; they can give buyers the competitive advantage needed in a tight market. As well, I advise buyers to always have independent representation. Avoid the pitfall of entering into a dual agency situation when the selling agent represents both the buyer and seller. You deserve your interests to be championed throughout the buying process.