Top 5 Tips for Home Buyers in a Competitive Market
I just helped a home buyer purchase his first home. Here's how we did it. Also known as My Top 5 Tips for Home Buyers in a Competitive Market! Plus some Bonus Tips!!
1) Know your Purchasing Power!
The second you decide you would like to become a homeowner, find a lender you trust and learn your purchasing power. It doesn't make sense to look at homes you can't afford. And you will need a preapproval letter to write an offer, so the sooner you speak with a lender, the better.
2) Find your buyer's agent!
For many first time home buyers, their first phone call is to the listing agent of a home that they like. That's not in your best interest. You want to make sure that you have your buyer's agent who has your interests as their priority. In most cases, the seller pays the commission for the buyer's agent, so there's no reason not to have an agent to guide you through the process.
3) Get your Search Dialed In!
In a competitive market, you only have a few days from when a property is listed, to when the offers are due. You want to make sure that your search is dialed in and laser-focused on your wants and needs. That way, you're ready to tour the property the second it goes on the market, and then you have a little bit of time to drive around the neighborhood and do some due diligence before you have to write an offer. There's nothing more frustrating than seeing the perfect home and then watch it go Pending before you've even had a chance to tour.
4) Hustle, Hustle, Hustle!
In a competitive market, you need to treat home buying as a second job. You need to be as flexible as possible and be prepared to go tour homes as soon as they go on the market. Now, this can be difficult if you have non-traditional work hours, kids, pets, etc. But if you make that commitment to hustle, you will have a better opportunity to secure a property quicker. Hustle has been a key indicator in helping a lot of home buyers secure that dream home!
5) Watch Trends and Be Realistic!
If your max budget is $300k and the trends show homes listed at $300k consistently getting offers of $320k or $330k, you need to start looking at homes with a lower price point. Regardless of budget, every home buyer has to go through the reality reset of what they envisioned they could buy versus what they can actually afford. Home buying means compromise. The sooner you have that reality reset, the faster you can secure your new home!
Bonus Tips**
Different lenders have different loan products. Talk to a few different lenders.
Real estate is different in every state. Local lenders know the local customs.
Not all loan products are equally competitive in a seller's market. Seller's tend to select the offer with the path of least resistance. If they have multiple offers to choose from, the typical hierarchy is:
1) Cash
2) Conventional (higher the down payment the better)
3) FHA/VA
Now, after hearing all of that, you may feel a little overwhelmed, but let me share this:
My buyer worked nights (non-traditional work schedule) and had a new, non-traditional loan product with a 0% downpayment. We were able to secure him a home on his first offer! Granted, we had a bit of luck. But I always like to say that hustle creates luck!
Please let me know if you have any questions.
Designed for: Home Buyers
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