If you are in the market for a new home or you have simply been keeping track of the housing market, you have undoubtedly heard of the low supply of homes currently on the market. This is tricky for prospective homeowners, as the demand for homes has only increased while the supply is at record lows. Homebuilders and realtors simply can not keep up with the influx of demand for homes. Time on the market for sold houses is at an all time low. In order to secure your dream home, you have to stay on your toes. Here are a few tips to help you secure the home of your dreams.
1. Establish Your Budget
Why It’s Important: You will be able to know what you can afford.
Home prices are rising at an unprecedented rate; therefore, it is important that you account for any fluctuation in the market. Having an established budget is important to know what you can afford. A mortgage is a large financial commitment, so you will have to consider what payments you can afford in the moment and in the future. Things to consider for the future would be potential home expenses and potential personal expenses. Whether it’s home maintenance or job changes, you need to account for any unexpected changes in your financial situation. Sit down, evaluate your financial situation, and create two budgets; a short-term budget and a long-term budget. Make sure you can handle the financial burden that comes with buying a home before you take the leap.
Another handy tip is to aim below your budget. By aiming below your budget you will be able to give yourself more wiggle room in order to bid higher if need be.
2. Get Pre-Approved
Why It’s Important: Shows a higher likelihood of closing.
When a seller accepts an offer, they have to take their home off the market. If the offer falls through, the seller is back to square one going back through the processes of listing, showing, and evaluating offers. Therefore when approached with multiple offers, pre-approved offers logically stand out from the others. This will help you with establishing your budget as well. You will have a better understanding of your price range by getting pre-approved. Getting pre-approved will give you more confidence and potentially give you the energy to finally pull the trigger with a house.
3. Stay Alert
Why It’s Important: You have to stay on your toes in a seller’s market.
While you are operating in a buyer’s market, you are given more leeway with acting more leisurely in your search for a home. However, in a seller’s market you have to move fast. Chances are the house you have your eyes on in a seller’s market is being viewed by several other potential buyers. Being attentive to new listings and quickly setting up visits to houses you are interested in is crucial. Be ready to make a move on a house in order to beat your competitors.
4. Write a Love Letter
Why It’s Important: A seller will respect a more heartfelt approach towards their home.
Nostalgia is a funny thing, a seller might be more inclined to accept an offer if you write a short personal letter about the home expressing how you would enjoy living there. Try to relate to the home seller and let them know that their former home will be in good hands. People spend most of their free time at home and develop fond memories of their houses. Let them know that you will honor those memories and make new ones of your own. Also let them know that you will keep the architectural heritage of a home. For example let them know that you will tend to the garden or yard. Seller’s would appreciate knowing that their home is going to be in good hands.
5. Prepare for War
Why It’s Important: No one wants a bidding war; however, you have to be prepared for one.
While a bidding war can be a stressful situation for home buyers, you still need to be prepared for one. Due to the low supply and high demand, bidding wars tend to be more common during a seller’s market. No buyer wants to be a part of a bidding war due to the possibility of going over budget. Make sure to keep your composure and know when to pull out if the price gets too high.