I have been a Realtor for almost 40 years, and this current market is one of the trickiest I have seen for buyers ever. Housing inventories are at historic lows and interest rates have been rising. I have quite a few clients searching for homes and it has been a tricky and sometimes frustrating process. The good news is that it is not impossible to find a home when inventories are low, you just need to keep a few things in mind:
Prepare to Write a Quick Offer
Keep in mind that no seller in this market will even entertain an offer from a buyer who is not already pre-approved. Obtaining a pre-approval takes time – if you wait to start the process until you find your dream home, it will likely be under contract before you can get the pre-approval letter in hand. So, before you even start looking at homes, get in contact with a mortgage lender and get a pre-approval letter. Your mortgage lender will help you determine much you can afford to spend (including your down payment and closing costs). Work with your agent to ensure you are looking in a price range that allows you to make the best offer possible.
Get Ready to React
You will not have much time to see listings. Well priced homes in good condition sometimes go under contract in a single day or just hours after they are listed. You have to make yourself available to see new listings and you need to mentally prepare yourself to write an offer quickly. In this type of market you will not have a few days to think about whether or not this is the right home for you. This does not mean that you should buy the first home you see or that you should compromise on criteria that are most important to you in a property. You just need to be prepared to write the offer immediately when the right house comes along.
Trust your Realtor and listen to her advice. Look over the comps and make your first offer a good one. If you know you are in a multiple offer situation, work with your agent to submit your highest and best offer. You may increase your chances by writing a personal note to a seller when submitting your offer. Tell them why you like their house and help convince them that you are the right buyer.
It’s easy to feel desperate or discouraged as a buyer in this type of market. Remember that the house must appraise for the sales price on the contract or the lender will not allow the loan to go through as written.
You may lose out on several homes before you go under contract. Keep your head up and remind yourself that there will be other homes that will work for you. Keep evaluating your list of “must haves”. You can always renovate a home over time to fix things that may be less important on your list. Taking your price range a bit lower or higher may give you new options to consider. Above all, keep your budget and goals in mind and trust that you and your agent will find the right home.
This is certainly a challenging time to be a buyer. But, even with low inventory levels, new homes are being listed every day and I have 4 clients closing on home purchases in the coming weeks. A couple of those clients had written contracts on other properties but had been beaten out by other buyers. Be patient and follow the steps above – you will be able to find the right home that works for you and your family, it may just take a little longer than you had thought. The good news is that these market conditions will not last forever. There is one constant in life & that is change.