As we’ve covered in previous articles, prospective homebuyers currently find themselves in a very competitive market characterized by low inventory and high demand. Multiple offer situations have become the norm, making it challenging to secure your home.
I thought this month it would be good to dedicate some time to how to improve your chances as a home buyer in this marketplace. With strategic planning and a proactive approach, you can enhance your chances of success. What follows are some tips if you are a buyer in our currently competitive market.
1. Get Pre-Approved for a Mortgage
If you are not a cash buyer, one of the first steps in the home-buying process, especially in a competitive market, is getting pre-approved for a mortgage. Pre-approval not only helps you understand your budget but will be required before making any offer on a property. If you find the right home, you want to be ready to strike. Be sure to opt for a reputable lender and ensure that your pre-approval letter is up-to-date and tailored to the offer you are making.
2. Make a Cash Offer if Possible
Alternatively, a cash offer can be a game-changer in a competitive market. Sellers often prefer cash offers because they typically close faster and with fewer complications. If you have the means, making a cash offer can significantly increase your chances of winning a bidding war. If you don’t have enough cash on hand, consider seeking temporary financial help from family members or close friends.
3. Work with an Experienced Real Estate Agent
Having a knowledgeable and experienced agent who you trust to represent your interests is a real advantage. As you work with your agent over time, they will understand what’s important to you and can provide valuable insights, hone your buying strategy and navigate the complexities of multiple offer situations. A common mistake I see made is buyers who, often because they feel like they can’t trust any agents at all, will want to work directly with each listing agent to see each property and then submit an offer. First, this will preclude you from developing a relationship with a single professional who will know your viewing history, must-haves and other requirements that are important to you. And importantly, you should understand that a listing agent is acting only in the best interests of the seller. You are at a disadvantage as a buyer in this situation.
4. Be Ready to Act Quickly
In a seller’s market, homes can get snatched up almost as soon as they are listed. Being prepared to act quickly is essential. This means being decisive and ready to make an offer as soon as you find a home that meets your criteria.
5. Make a Strong Offer
When it comes to making an offer in a competitive market, put your best foot forward right from the start. This doesn’t just mean price, but also presenting an offer with other terms that are attractive to the seller, like removing contingencies or being flexible about your closing timeline.
6. Stay Resilient
In a competitive market, it’s not uncommon to face rejection, even with strong offers. It’s important to stay resilient and not get discouraged. Each offer you make is a learning experience that brings you closer to finding the right home.
7. Consider Alternatives
If the market in your desired area is particularly tight, you might want to consider alternative options. This could mean looking in adjacent neighborhoods, considering different types of properties, or even exploring homes that need a bit of renovation.
While our market remains challenging for buyers, with the right approach and a bit of perseverance, you can find the home that’s right for you. By controlling the factors that are within your influence, you can dramatically improve your probability of success.
