Saying that the housing market is highly competitive is an understatement. Continued tight inventory means buyers can expect conditions to continue. But if you’re looking to make a move, whether first-time homebuyer or not, don’t let frustration rule the day. As with any challenge, being prepared is often the key to coming out on top. Someone is getting an offer accepted—it may as well be you!
As your agent, I can help ensure that you make the strongest offer you’re able to, including an earnest money amount that reflects how serious you are about the house. That being said, here are some tips to keep in mind if you are gearing up to buy a home in today’s competitive housing market:
Before you start looking, get pre-approved
It’s the dullest part of the journey, but before you start picking out beautiful houses, you need to get to a lender and get pre-approved. A letter of pre-approval accompanying your offer, which indicates the lender has done some preliminary income verification, will strengthen your bid in the eyes of the seller. One of the biggest headaches for a seller is having a buyer’s loan fall through.
Be willing and able to act quickly
This is probably the biggest hurdle for buyers, but also one of the biggest reasons buyers miss out on a house. Gone are the days when you could make a second appointment to see what your parents think or measure to see if your furniture will fit. You will need to act immediately when you find a house that fits your needs. The best way to put yourself into position for doing so, without ending up with buyer’s remorse later, is to spend some time on the front end thinking about your criteria for a new home, then prioritizing your list of wants and needs. If you go into a showing with a very clear idea of exactly what you want, you will be ready to act quickly if the home checks enough of your boxes.
Engage your agent in your search from the start
It’s great to browse homes online, but with the market on fire, you’ll have the edge if you engage me as your agent to help in that search. I have immediate access to homes as soon as they hit the market. Even better, I know about inventory that isn’t even on the market. I can tell you about programs we have available at The Offer Company that can make your search for a new home easier and more effective. You don’t want to fly solo for very long in this market.
Be willing to accommodate the seller
As your agent, I can communicate with the listing agent to try to learn of any priorities the seller may have. As a buyer, you will want to accommodate the seller’s preference for a closing date as much as possible. There may be other steps you can take, such as shortening the window for inspections. In most cases, the selling agent is not going to want things to drag on any longer than necessary. But, they may also be concerned about buying their next house in the same competitive market. Offering to rent the house back if necessary could be an option, but there are pitfalls to doing so as well, so be sure you understand all the ramifications.
Reduce the number of contingencies
This should go without saying. The fewer contingencies in a competitive market, the better your offer in most cases. Rather than making the purchase of your new home contingent upon the sale of your old one, take advantage of The Offer Company’s Home Swap program. While some buyers are removing the inspection contingency, that’s not recommended in most cases.
Should you include a heartfelt letter?
Even before the market was this competitive, there were some buyers who included a heartfelt letter with their offer, explaining how much it would mean to them to own this particular house and promising to take loving care of it. It may sound brutal, but the fact is, most sellers are not going to be swayed in your direction due to a letter when they’ve got a better offer on the table. If you think it can make the difference when your offer is competing with a similar one, go ahead. Just don’t count on a sincere letter taking the place of a strong offer.
Make no mistake, it can be a brutal process to buy a home in today’s market. That’s why now, more than ever, you need an expert on your side who knows the area inside and out, and who is experienced at making and negotiating contracts on behalf of their clients.