We all want our own dream home one day but it’s easier said than done. If you’ve decided to buy a home, good luck to you. Your challenge will be not just finding a home you like, but also beating out all the other home buyers who like it and want to make an offer on it, too.
The number of homes for sale is low nationwide, particularly in the price ranges desired by first-time homebuyers. The latest figures from the National Association of Realtors show that there was only a 3.5-month supply of homes for sale in March, which is lower than the six-month supply that indicates a balanced market.
One-quarter of March’s transactions were all-cash sales, according to the NAR, and investors bought 14 percent of the homes that were sold.
Is This Year a Sellers Market?
That means that if you want to end up with a nice home, you need to be strategic. Expecting to find the home of your dreams by nonchalantly walking into a few open houses or perusing some online listings is not realistic in this seller’s market.
These days, most would-be buyers come to an agent with a list of homes they’d like to see based on their online research. While that often serves as a solid starting point, a quality agent may find additional options.
After buyers have seen a few properties skilled agents can typically gauge what they’re looking for in a new home and may have other properties lined up. “I advise them to listen to their Realtor,” she adds.
Here are nine tips to help you get the house you want this spring
Get your finances in order first. Several months before you intend to start looking, you should get copies of your credit reports to make sure you’re in a financial position to buy. Shop for mortgage financing before you start looking at houses.
I will not take anybody to see any house unless they have a pre-approval letter or proof of funds, I want proof of funds to show the seller. That some lenders are doing the underwriting before the house is under contract, which shortens the closing time and can be more attractive to the seller.
A Good Agent Will Go Along Way
Find a good agent. Using a real estate agent costs buyers nothing because the seller pays the real estate commission. Ask friends, family, and co-workers for referrals. Look for a full-time agent who works often in the neighborhoods where you’re looking.
You may want to interview several agents to find a good fit. If you can only look for homes on weekends, for example, you don’t want an agent who takes weekends off.
Visit neighborhoods you’re considering at different times of the day. A neighborhood that’s quiet during the middle of the workday may be noisy and crowded at night and on weekends.
Get out and walk the streets, talking to people who live in the neighborhood, visiting shops and restaurants, and “trying out” your desired location. Drive to and from work during commuting hours to get an idea of what a typical day might be like.
Separate your needs from your wants. In a competitive market, most buyers find they have to compromise on the location, amenities, or condition of the home. It’s easier to make a choice when you know going in which features you must have and which you’d like to have but can live without.
Move quickly once you find the house you want. That often means rushing out to see new homes within hours of them being listed and writing up an offer immediately if you like the house. Things are gone in a matter of hours, you really have to move fast.
Don’t make snap judgments based on listing photos. A house that doesn’t look appealing in photos could still be a great house. Homes being sold by an estate or homes with tenants inside often yield particularly poor photos. Plus, photos fail to convey the feeling of a home or the floor plan. Unfortunately, the pictures don’t tell a true story. You have to be willing to look past some of the pictures.
Be realistic about the home inspectors and repairs. The more competitive the market, the less likely a seller will be to make repairs, though some sellers may lower the price if the inspection reveals expensive defects.
The purpose of the inspection isn’t to get the seller to repair every small problem but to find out for sure that the house is what you thought it was. They’re not buying a brand-new home. What we are looking for are major defects we were not initially able to see in the walkthrough.
Don’t buy a house you don’t love. While most buyers may have to compromise on some of the features they wanted, they shouldn’t settle for a home they don’t like. If you don’t find the right home this year, maybe you should start renting and try again later rather than make a purchase you’ll regret.
Write a personal letter to the sellers. Some sellers are interested only in how much money their home sale will yield, but others love their home and want it to go to a new family that will love it just as much.
If you really like a house, include a personal letter and a family photo with your offer. It doesn’t work for everybody, but I have seen it work for many, many people.
Make a big earnest money deposit. The expected size of the earnest money deposit, and the rules about when you get it back, vary by locality. But sellers often see a larger deposit as a sign that you’re serious about the deal.
Make a backup offer. Many prospective buyers don’t want to make an offer on a house that has a pending contract. But deals fall apart over inspections, financing, and other terms. If you found the perfect house, you can make a backup offer that will put you in the first place if the initial buyer walks away.