Many prospective home buyers are finding themselves in competitive real estate markets, where homes sell very quickly and many sellers receive multiple offers. While this can be discouraging for buyers, there are specific strategies to implement that will make it easier to snag a great house. Here are a few tips for successfully buying a home in a tight real estate market:
Apply for a Pre-Approval Letter
Many home buyers wait until they are ready to make an offer to have a pre-approval letter in hand, but in a competitive market it's better to already be prepared. Applying for a pre-approval letter from a mortgage broker will show you exactly how much of a mortgage you qualify for, based on your income, current debt level, credit score, and other factors. When you already have this letter available, you can make an immediate offer on the right home. Buyers will be reassured that your offer is reliable and unlikely to fall through, since you've already been approved.
Focus on Homes Lower Than Your Budget
In such a tight market, there is always a chance a buyer will receive multiple offers and the winning bid will be over asking price. If you set your home shopping budget to lower than you can technically afford, you will have some room to work with if this happens. You may even surprise yourself by falling in love with a home that sells for lower than you were planning to spend.
Remove Contingencies from Your Offer
In less competitive markets, buyers could include all sorts of contingencies in their offers. This might mean anything from saying you will buy the house if the sellers leave the patio furniture behind to insisting on a very specific closing date. In a tight market, however, buyers will likely go with the offer that's for their asking price and also makes their life easier. This typically means an offer with no contingencies. Ask yourself if your contingencies are really deal-breakers, and if they're not, simply let them go before your real estate agent drafts your offer.
While buying a home in your budget that has all the features you're looking for is certainly more challenging in a tight market, it can be done. By following these tips when looking at houses for sale, and working with the right real estate agent, you will soon be on your way to signing a contract on a new home.