Getting the most for your money in a seller’s market
In highly desirable areas, the real estate market will remain a seller’s market in 2021. If you’re planning to shop for homes later this year you may be wondering how you can affordably do so, given the current economic climate.
Don’t stress–we’re here to help you get the most for your money, even in a seller’s market.
Tip #1: Understand the market
In a seller’s market, there are more buyers than there are homes for sale, creating an unbalanced market that tends to drive up demand and price. In desired areas and price points, homes will go very quickly and will often receive multiple offers. In order to be a competitive buyer, it’s important to set yourself up for success from the onset.
Tip #2 Start your search early
To make the most of a competitive market and to get the most for your money, make sure to start the home search early. Meet with a Realtor early on to talk with them about your search criteria and get a game plan for how to make the most of your home search.
Be okay with the process taking longer than you anticipated. The latest data tells us that in a highly competitive market, the average home buyer toured 19 homes and spent three months searching for the right place.
Keep in mind too that you may be outbid a time or two on your quest for your next home, so getting your mindset right ahead of time will help you stay positive throughout the process.
Tip #3: Get pre-approved first
Be ready to make a competitive offer that sellers will take seriously when you get pre-approved before you even shop for homes.
Unlike a pre-qualification, which is traditionally an automated review of your credit report, credit score and stated application information, a pre-approval scrutinizes every aspect of your creditworthiness.
A pre-approval determines exactly how much you may borrow under a specific mortgage program. It’s also a great way to distinguish your offer in a highly competitive, low inventory market. In other words, once you’ve obtained your pre-approval you can shop for homes with confidence! Get pre-approved now and shop for homes with confidence.
Tip #4: Shop for a mortgage locally
Would it surprise you to find out that shopping locally for a mortgage is actually one of the best things you can do when it comes to having your bid accepted?
A lot of people think that the highest bid is the one the seller automatically chooses— and ultimately there’s a lot more to it than that.
Good Realtors will advise their clients to look beyond the dollar signs of the offer— not that offer price isn’t something that’s important, because it is, it’s just not the only thing sellers should consider. Just like conditions are important to weigh in the decision process, sellers should also think about whether or not the prospective buyer has been vetted and truly pre-approved by a local lender.
Find a local, experienced mortgage professional with Allen Tate Mortgage today.
Tip #5: Make a clean offer
Now is not the time to attach all types of contingencies to your offer. Normal contingencies that depend on financing or passing inspection are completely fine, but having too many unreasonable stipulations is likely to cause your offer to be rejected.
If you’re having trouble sorting out what’s acceptable and what’s not, it’s best to talk with your Realtor. In the meantime, you’re welcome to browse a helpful article we wrote on the topic.
In a highly competitive market, it’s imperative that your offer stand apart from the rest. Some buyers offer to cover some of the expenses that are traditionally covered by the seller, and still others attempt to minimize the number of contingencies requested to stand out.
You can also go the route of presenting a full-cash offer, thanks to the help of one of Allen Tate’s technology partners, Ribbon.
Through our partnership with Ribbon, first-time homebuyers can present an all cash offer, backed by Ribbon, to win deals and close in just 14 days.
Additionally, if you’re trying to purchase a home but need to sell yours at the same time, you can take advantage of the Buy Before You Sell program, which removes all contingencies so you can buy and move into a new home before selling your current one.
To learn more about how a cash offer can make your offer the winning offer, you can learn more or sign up for a free consultation.
Tip #6: Set a budget and stick to it
As you know by now, there may be others that have their eye on the same house you do. Don’t let emotion dictate how much you should spend–before you even start your home search identify your max budget–this way you won’t end up offering more than your comfortable with in a multiple offer situation.