Low interest rates continue and so does the trend of the low inventory of houses for sale. Even the most qualified homebuyers are being outbid and left frustrated, or even paying beyond their means to secure a new home. What can you do to land the home of your dreams without losing your mind?
The best way to be competitive is to be prepared. Have the right professionals in your corner who are experts on the process and able to give you the best input available. Not only is it a unique market because of inventory and interest rates, but also because of the restrictions and precautions necessary to be safe in the time of COVID-19.
In some cases, sellers are requiring proof that potential buyers are pre-approved prior to being allowed to view the home in person. Pre-approval is the process of having a lender look at your credit report, assets, and other factors to pre-determine the type and amount of loan you can secure.
Being pre-approved makes you a more informed and prepared buyer. Knowing your budget and exactly how it breaks down for your monthly payment, your closing costs, and your down payment is CRITICAL. Before you go see homes, make sure you can become pre-approved through a reputable lender. This determines what range of homes is in or out of your budget.
Know your ‘must-haves’ vs. your ‘wants’ and ‘wishes.’ You’ll be able to narrow down the pool of homes you want to see in person and potentially even write an offer on. Your ‘must-haves,’ or ‘non-negotiables,’ should be things you cannot live without such as the number of bedrooms or bathrooms, neighborhood, type of garage, or perhaps more importantly, the top offer price you are comfortable with.
Don’t end up like the SNL Zillow skit and only dream of homeownership. The person who can best keep their eyes and ears to the ground for new homes available, and to write the best offer on your behalf, is your buyer’s agent. They know what homes have sold for, how to craft the most competitive offer, and can warn you of red flags you might miss. They also work closely with your lender to make sure the process is as smooth as possible for you.
Most of all, try not to get caught up in the moment, and make sure you listen to your gut instinct. If something doesn’t feel right — even after consulting with your team — it probably isn’t. Be your best advocate and stay in line with what you want to spend, what you want your home to include, and set yourself up for financial success.