Today’s market is definitely a seller’s market with the low-interest rates and scarce inventory. There are tons of buyers out there today, so how can you stand out among them? Here are six tips you can follow to help win in this competitive market.
Usually, a pre-approval is the first step when it comes to a mortgage. However, completing the underwriting upfront will give you more of an advantage as a buyer. Finalizing your paperwork gives you as the buyer a better picture of your cost, plus it gives the seller confidence that your financing will go through.
Search with the market in mind.
The current housing market is seeing tons of bidding wars and with these bidding wars come appraisal gaps. You might have to offer over the asking price when it comes to getting an accepted offer. So keep in mind that your top price range for your search has to be well under the top end of your actual budget.
Tour unexpected neighborhoods.
Having an open mind to look outside of your dream neighborhood will give you more options. In a buyer-driven market such as this one, you might have a better chance when looking into an area with less interest. According to Flyhomes, buyers who are open-minded to different neighborhoods often have a less stressful experience than those that are hyper-focused on one buzzy zip code.
Be open to PMI.
Remember when putting less than 20% down, lenders will require private mortgage insurance (PMI). During bidding wars that cause appraisal gaps, it would be in the buyer’s best interest to put more money into their budget than their downpayment. The historically low mortgage rates we are seeing today make payments with PMI more reasonable and affordable.
Make it easy for the seller.
The easier for the seller the more likely they are to choose your offer. Make your offer attractive to the seller with a strong summary email attached to your offer. Also, follow up with the seller while they are making their decision.
Start with your strongest offer.
Today’s market means you need to put your best foot forward from the beginning. The majority of today’s sellers are receiving multiple offers. There is no need for negotiating back and forth on pricing, sellers just jump to the next offer. If you are interested in a home, put your offer in quickly for the best price you can offer upfront.
Follow these six tips and you should have a less stressful house hunting adventure. Remember to always use a local sales agent. A sales agent can get you the best price and knows how to negotiate your terms so you can have confidence in your final offer.