You want to buy a house, but the market is hot right now. Should you wait until the competition settles down or should you go for it?
While buying a house in a hot market is stressful, it’s not impossible. There are some simple ways that you can get the house that you want.
Always Get a Pre-approval
Don’t try shopping for a home before you have your pre-approval letter. If you bid on a home without a pre-approval letter at the same time that another shopper does that has a pre-approval letter, the seller will likely choose the other buyer. This could happen even if your bid was higher! That’s because sellers want to know that you are serious and qualified to buy the home. That pre-approval letter lets them know both of these things.
Take the time to find a lender that you like and get your pre-approval letter. The pre-approval letter will show how much money you can borrow, what conditions you have to meet, and the date that the approval is good until. Sellers use this information to decide who will buy their home, so you’ll want to avoid skipping this step.
Working With a Reputable Real Estate Agent
Buying a home in a hot market is all about timing. You want to know about listings early and get in to see them right away. While you can do some of the legwork on your own, you’ll have much better luck with a reputable realtor.
Work with someone that knows the area and stays on top of the listings. Avoid real estate agents that work part-time or don’t have that lightning quick response that you need. Potential buyers are going to get in to see the house whether you do or not, but if you want a chance at buying it, you have to beat the crowd.
Don’t Underbid the Home
In a hot market, chances are that you’ll pay more for the home than you may have wanted. This is not the time to send in a lowball offer hoping that you catch the seller on a good day. Instead, do your research and find out the fair value for the home.
You can do this by looking up recent sales in the area. Make sure you compare homes that are similar to the one that you want to buy. Compare those sale prices to the seller’s asking price and determine your fair price from there. You can also use the services of your real estate agent. They can guide you to the right price and help you avoid the mistake of making a low bid.
Get to Know the Seller
Even if you use a realtor, you can still get to know the seller. Adding that personal touch can help you get the winning bid on the home. Sometimes a small connection with the seller is all that you need. After all, you are buying a very important piece of their life – they want it to go to someone that will take care of it like they did.
If you can’t get to know the seller yourself, consider writing him/her a note. In that note, you can explain your reasons for wanting the home. Sometimes those reasons will strike a chord with the seller, prompting him/her to accept your bid even if it’s not the highest one they received.
Watch Your Contingencies
While it’s tempting to want to ask for every contingency possible on a purchase contract, it’s not always the best option. Sellers want the sale that’s going to go through – not the one that might bail at the last hour.
Of course, don’t skip contingencies that you absolutely need, like the financing or sale of home contingency. But don’t overload the contract with every contingency known to man or you might scare the seller right into the arms of another buyer.
The final tip is to be patient. Buying a home in a hot market is stressful, but it’s not impossible. You just have to give it time. If you don’t win the bid on the first home you bid on, know that there are other fish in the sea. Your right home will come along and when it does, you will know it.