The spring season tends to flood the housing market with buyers. Experts recommend sellers have their loan pre-approved and down payment ready before starting their search.
Multiple bids are always a possibility. Be ready to compete and do your homework to seal the deal. The longer the negotiations, the more chance you could lose out to someone else who made a better offer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.
While you have to compete in the current market, maintain your budget. “You don’t want to end up paying more for the house than it’s worth,” Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property.
To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:
- Plan Ahead: You have to plan four months before you’re going to buy. Check your credit for accuracy and avoiding making any big purchases or taking on any big debt during this time.
- Set Your Home Price: “Don’t look at a $300,000 home if all you can afford is $250,000. If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price. Learn how to spot a great deal by researching an area’s home prices and if you spot a great deal, don’t wait days to make an offer.
- “Do a little due diligence and go to open houses—do your homework. Being educated will help you negotiate and could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.
- Know that Cash is King: The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage. If your appraisal is low, don’t expect the appraiser to come up in value. Appraisers are under scrutiny with the banks and they have to justify everything they do.
- Get Pre-approved before Your Search: Getting pre-qualified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process. If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.
- Limit Your Contingencies: Experts suggest having as few contingencies as possible to be an alluring buyer. Don’t over complicate your offer to the seller. Experts advise making an offer based on a satisfactory home inspection.
- Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home.
- Add a Personal Touch: Sending a letter to explain why you want to buy that house then you become a person who really loves and appreciates the home instead of just a number.
- Be Flexible with Closing Dates: Let the seller know that you would be flexible on the closing timeline. Find out when the seller would ideally like to close on the house and see if you can match it.