Don’t Be Shocked to Pay More Than the Asking Price…
Spring is usually the start of the home-buying season, but 2021 might defy the old model, one that counted on seasonality—and the traditional ways we shop for houses.
Home-buying activity is hot—and it will likely just get hotter as the spring buying season continues. Instead of the pre-pandemic spring buying surge eager buyers have already been lining up to buy a house for months, including during the usually slow winter season.
7 Buying Strategies to Use in a Competitive Market
1. Get a Mortgage Pre-approval: While there are various methods buyers can use to snag a home in today’s rabid market, the one resounding rule all experts agreed on is to get a mortgage pre-approval before you begin house hunting.
2. Look for Homes Under Your Budget So You Can Bid Up: Tales of multiple—sometimes dozens— of bidders —on one home are not hyperbole. This is real life in today’s housing market. For buyers, that means you probably shouldn’t look for homes at the top of your budget, as you can count on someone else outbidding you.
3. If You’re Borrowing Money, Give Yourself Extra Time: It’s not uncommon for first-time homebuyers to borrow money to make a down payment. However, this should be factored into your timeline. Talk to your lender about any funds you expect to receive so they can walk you through the process. For example, if someone is giving you money for the down payment, they will have to write a gift letter explaining that you don’t have to repay the money.
4. Get the Best Real Estate Agent Possible: An excellent real estate agent is every buyer’s secret weapon. They’re not only great negotiators and have a solid understanding of the neighborhood you’re interested in, but they also have terrific connections, which will benefit you.
5. Don’t Fall in Love With Just One House—But Don’t Give Up Either: Don’t get fixated on one house, as that can lead to major disappointment, or worse, bad financial decisions made out of desperation. However, that doesn’t necessarily mean you should run the other way at the first sign someone outbid you or came in with a tempting all-cash offer.
6. It’s Not Always Just About Price: Look beyond the cost of the home when you’re trying to win a house. You and your agent should find out what (beyond the listing price) is important to the seller that might give you an advantage.
7. Expand Your Search: The most sought-after neighborhoods come with the highest price tags. If you have your heart set on owning a home and living in a specific but out-of-budget neighborhood, you might have to choose between them. For those who opt for homeownership over a coveted ZIP code, that means looking in other areas.