Determine and Stick to a Budget
Before starting the house hunting process, prospective home buyers should receive pre-approval from one or more leaders to confirm the amount of money they are qualified to borrow. Once this has been done, and after taking additional costs of ownerships such as taxes, utilities and insurance into account, buyers should determine a final budget they can comfortably afford. When listings are scarce, bidding wars can drive up prices, so buyers must be prepared to walk away if the asking price surpasses their budget.
Identify Desired Neighborhoods and Home Wants Versus Needs
Buyers may need to compromise on what they believe they want from a home when housing inventory is tight. Specific wants, such as stainless appliances or hardwood floors, can be added later. However, if a buyer wants to be in a certain school district or have a decent sized backyard, those cannot be addressed later and must be considered during the house hunting process.
Be Ready to Make a Decision Quickly
Homes rarely stay on the market long in a seller’s market, so when a house that is in their budget and checks off all of their needs come along, buyers should not hesitate. They should be ready to submit an offer quickly, or they risk missing out on the home altogether.
Bid Competitively and Limit Contingencies
While it may be tempting to submit a low offer as a starting bid, in a seller’s market buyers need to put forward their highest offer from the very beginning or they are likely to lose out on the home. It is also critical to keep in mind that in multiple bidding situations, it is not always the highest offer that is most attractive to the seller but the one with the fewest contingencies. Removing restrictions related to the sale of a current home and being flexible with things such as the move-in date can make a bid stand out to a seller.
Work with a Realtor®
All real estate is local, so it is essential to work with an agent who is a Realtor®, a member of the National Association of Realtors®, and who is familiar with the areas and neighborhoods the home buyers are considering. Realtors® are the most trusted resource for real estate information and have unparalleled knowledge of their communities; they can give buyers the competitive advantage needed in a tight market.
These are just a few tips for buying a home in a tight market. For more information or to start working with one of our realtors, don’t hesitate to contact us here at DBL Real Estate with the link below!