The housing market is so hot right now and competition among buyers is fierce. Low interest rates are motivating buyers to want to purchase homes, but realistically, competition for a home can happen at any time you get two buyers interested in the same property. Great for the sellers! Not so much for buyers. Fortunately, there are a few tricks you can use to position yourself as the buyer who beats the others to the punch.
Tricks to Beat Out Other Buyers
When it comes to beating out other buyers, you have two avenues available to you. You can win out financially or you can come up with a better strategy. Either way, you have to prepare yourself emotionally for a bit of a roller coaster. Here’s what you need to know about how to compete for a home when, like now, you have a higher likelihood of having two potential buyers see the same house and call ‘dibs.’
Financially
There are certain things you can do that will make your offer on a home stand out from others. One of those things is to get pre-approved. This is different from pre-qualifying, as you know how much home you have the funds approved to go to buy.
Other things you can do to beat other buyers to the punch include the following:
- Make a cash offer. At the very least, consider offering a substantial amount in cash. This lets sellers know you’re serious and that you don’t have to go through various approval processes with banks and such.
- Waive contingencies. Many offers are contingent upon financing. Consider waiving this contingency, though only do so with great caution and if you know you can come up with the funds another way.
- Determine which type of loan gives you greater bang for your buck when it comes to money down, and other concerns. Common options include conventional fixed or adjustable-rate mortgage (ARMs), USDA loans, and FHA loans.
Ultimately, having your financing lined up ahead of time is essential if you want to be able to move forward in a highly competitive housing market.
Strategically
You can’t go wrong by starting your search with an outstanding real estate agent. Interview multiple candidates before choosing. Also, spend a little time exploring your options and deciding what you want, where you want to buy, etc.
Once you’ve found a home you’re interested in, consider a pre-inspection before submitting an offer. This means your offer won’t need to be contingent upon the inspection.
Also, be flexible. Understand you may want to make changes after the sale, but don’t place the onus on the seller to make those changes if you really want the home in a competitive housing market. You also may not be able to move in as quickly as you’d like after the close. This may be something you’ll have to live with to compete for the home you really want. There is more pressure on you to work with a seller than the other way around.
Emotionally
Emotionally, you must prepare yourself for the realities of searching for a home in a competitive marketplace. Be prepared to make compromises on the things you want vs. the things you feel you need in a home. Also, you must be patient. You may not get the first home you make an offer on. That just means you get to keep looking for one that’s an even better fit! Give yourself plenty of time before you “have” to move to find the right property and for all the pieces to fall into place.
Buying a home in a competitive marketplace can be challenging. It helps if you have your financial, emotional, and strategic ducks in a row. Start by calling Mid America Mortgage for your mortgage pre-approval.
