The spring brings many new homes to the market, but it also brings more buyers (which equals more competition for you). That’s especially true this year, with home inventory really tight all over the country.
A desirable home could be sold within hours, meaning you have to be ready to pounce fast. Here are some things that can help you succeed.
1. Get Pre-Approved
Getting pre-approved is a really smart idea. With a pre-approval, you give us financial paperwork and we run your credit. After doing that, we give you a letter telling you how much of a home we think you can afford (note that this is not a commitment to lend you that money).
Getting pre-approved is smart because it shows sellers you’re serious about buying a home and aren’t just window shopping. A buyer with a pre-approval letter has already been vetted, so the deal is more likely to go through.
Important note: A pre-approval is not the same thing as a pre-qualification, which doesn’t verify any of your finances. Don’t bother with a pre-qualification if you’re ready to buy now.
2. Be Available
In a hot market, the best homes can go really quickly. If your agent notifies you that a new home is on the market, it’s best to jump on it right away. Otherwise, you just may be out of luck.
Also, be quick about getting us the paperwork we need for your loan. A delay of a day or two can put you much further down the underwriting line, especially during the busy season.
3. Find a Great Purchase Team
This goes along with number two. Make sure you find agent who stays on top of all the latest listings (and homes that may not even be on the market yet). A good agent also keeps track of what you’re looking for in a home and shows you the ones that are a good fit for you. A well-connected agent can also recommend reputable inspectors to you who can fit you in quickly.
You need a lender who will regularly communicate with your agent to make sure the entire transaction is a smooth one. An experienced lender is also very valuable in a competitive market—for instance, I know I can spot potential problems before they happen and then get to work fixing them.
The bottom line is that strong relationships can make or break a deal during crunch time. You need a team who works well together and with you.
4. Know What You’re Looking For
If you have to be in a certain neighborhood or have a large kitchen, decide these things before you actively start looking for a home.
In a competitive market where you have to make snap decisions, it pays to know what’s a deal breaker. Otherwise, you might end up with a home with no backyard when it turns out that you actually wanted a large one.
Having a comprehensive list of must-haves helps you make smarter, quicker decisions when the time comes.
Sometimes what you are approved for and what you’re comfortable paying are two separate things. Have my team run the numbers at different price points so you know how different home prices affect your payment. And most importantly, know what your max purchase price is and stick to it.
5. Make a Strong Offer
Technically, you can always try to negotiate a sale price. But in a hot market with limited inventory, homes frequently go above asking price rather than below it.
So create a strong, fair offer from the get-go. A hot market isn’t the time to try to get the deal of the century. A real estate agent with solid knowledge of the local market is a great asset when it comes to writing a strong offer.
We’ll also stay in close touch with you about how soon we can close. Part of strong offer is showing the seller how soon they’ll get their money.
This is why you need a great purchase team, like we mentioned above!
6. Figure Out Your Down Payment
One of the hardest parts about purchasing a home can be coming up with the down payment. If your down payment is coming from a relative, work bonus, retirement account, or anything other than your good ol’ savings account, let us know ASAP. We may need some extra paperwork, and we don’t want it holding things up.
7. Don’t Change Anything
Make sure that you don’t make any work or financial changes while you’re searching for a home. New jobs, new cars, new credit cards, new anything, really, can delay the process and force us to re-disclose or explain things to the underwriter (who gives the final stamp of approval on your loan). It’s very important to keep everything as-is all the way through the process.
If you’re thinking of buying in the next few months, I hope you’ll give me a call! I’m here to help you with a pre-approval so you can make your offer as strong as possible.