6 Tips for Buyers in Competitive Real Estate Markets

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The housing market is booming. Driven by the confluence of supply shortages and historically low interest ratesperhaps we live in one of the most challenging eras – ever – for home buying. And the data confirms this: last month, Redfin reported some really discouraging statistics that show how much the market has shrunk since last year. Here’s a grim shot comparing the housing market in August to a year earlier:

  • Median house sale price increased to 361,225 US dollars, an increase of 16%.
  • Asking prices increased by 10%
  • Incomplete home sales increased by 10%
  • 84% of contracted homes accepted an offer within two weeks of entering the market.
  • Active ads decreased by 23%

Trying to buy a home in such a market may seem impossible. And it’s not uncommon for a potential buyer to get frustrated after his dream home beat the price. But there is hope – and there are proven ways to get an edge when looking for new property. Speed ​​will be critical: The average home only spends 18 days on the market, so it’s important to move quickly once you find a home you like. Here are some ways to get ahead of the rest.

Get a pre-approved mortgage

No time to waste in a competitive market, and pre-approval of a mortgage will tell you that you are a serious buyer. Before starting your search, contact the lender and let them know that you are interested in financing… After collecting your employment history and income information, the lender will provide a letter stating that you are pre-approved for maximum loan amount and interest rate… Prior approval does not guarantee a loan, but it does qualify you for funding if all of the documents you provide are correct. You can read more about pre-approval here

More details: Everything you need to know to get pre-approved

Bring a deposit

When the seller accepts your offer, he or she removes the house from the market in exchange for a deposit – usually 1% to 3% of the sale price – as collateral so you don’t back out of the deal. The seller deposits the money into an escrow account prior to closing and then returns it by transferring it to your advance payment… While it is common to make a deposit, including it in the original offer can make a difference. If you are serious about your home, consider asking your realtor to include a photograph of the deposit check with your offer. You won’t need to generate cash if the offer is not accepted, but this strategy lets the buyer know that you have the funds to support your offer.

Rate what you need

Shopping in a competitive market can be discouraging, especially if you’re inflexible. When prices are high and inventories are low, you may have to make concessions. You can improve your chances by evaluating what you need. For example, if you have Small children, your top three priorities might look like this:

  • Good schools
  • Spacious living spaces
  • Fenced yard

In the city, other problems may take priority, for example:

  • Large bedrooms and extra privacy (especially if you have roommates)
  • Convenience and reasonable estimates of the HOA
  • Convenience of walking in the neighborhood, such as proximity to work or public transport.

To let go perfect kitchen or an extra bedroom becomes easier if you focus on things you can’t live without. Review the list frequently to focus on your top priorities.

Expand your search

The growth in acreage is likely to keep pace with the market, which means the outskirts of the city could bounce in five years. Consider getting out of your ideal location by searching in nearby cities. you can find the best prices and more square meters.

Don’t be limited to decor

Realtors and home agents encourage sellers to design in neutral colors and delete family photos for one reason: buyers are poor at visualization. And this is not their fault: Half of the human brain is devoted to visual processing, and even something as simple as a rug or good lighting can make or derail a sale. When walking around the house, try to go beyond the superficial:

  • Simple fixes: Paints, skirting boards, cabinet fittings and other minor improvements easy to fixand you don’t have to rule out every home that doesn’t suit your taste.
  • What does not remain: Home staging is powerful. 63% off realtors said shoppers asked their homes to look like homes shown on TV, and 68% said shoppers were disappointed with how their homes looked compared to TV shows. You can easily buy new furniture, but you cannot easily move walls… Look at the bones at home to determine if it suits your needs.

Get creative

It’s not enough to wait for your agent to send you an email with new ads; sometimes you need to get creative. I found my Seattle home on Craigslist in 2012, just before the Zillow listing became available. When I was unable to contact my realtor, I called the seller’s agent and contacted him directly. “I have 20% less, I AM pregnant and I can’t shop anymore. Please sell this house to me! »After we outbid the bid, we wrote to the seller a letter explaining why we could not give higher offer (we were expecting a baby) and why we were the right couple for the house. It worked: We bought the house for just $ 27,000 above the asking price – a miracle for Seattle – although there were other offers.

In another example, a friend wrote letters to each address in his favorite area, asking them to first think about whether anyone was thinking about selling. One family was, and he bought their house on a private sale. The essence: Money that’s great, but that’s not what motivates every salesperson. Consider the human factor and personalize your offer.

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