5 Secrets to Landing Your Dream Home in a Seller's Market
Consider these strategies for how to be a standout buyer in today’s market.
Welcome to the seller’s market. Sure, it’s an exciting time if you’re looking to list your home. But if you’re primed to buy, get ready to face some competition from other buyers. A recent report by Zillow highlighted a nationwide housing shortage, high buyer demand and rising home prices. As a result, some prospective homebuyers are struggling to stand out against the competition.
To help “get a leg up” on other potential bidders, here are five strategies for you to consider as you prepare for the purchase process:
1. Get pre-approved for a mortgage.
Want to show a seller that you’re a serious buyer? Consider getting pre-approved for a mortgage. Many home sellers prefer to see a buyer who has been pre-approved, especially if he or she is looking to move quickly, as it can save time during the closing process. When your purchase offer is coupled with evidence of your loan pre-approval, you could position yourself above other buyers who do not show the same sound financial backing. In addition, it allows you the peace of mind knowing how much house you can afford.
Keep in mind that loan pre-approval is not the same as pre-qualification:
- Loan pre-approval is a statement of intent from a lender to finance a loan of a specified amount. To be pre-approved, your finances are subjected to an in-depth underwriting review that includes a credit check, confirmation of earnings, inspection of bank accounts and more.
- Loan pre-qualification is a faster and usually free process in which a lender approximates the size of a loan that you can afford. A lender uses some basic information from you – assets, debts and income – to compute the estimate.
2. Understand the market in your desired neighborhoods.
Start by looking at online real estate listings and begin zeroing-in on a few desirable target neighborhoods. The geographic area and neighborhood you choose can be a major factor in determining how much house you can get for your money. Consider if there are specific school districts you want to be located in as well. You may find that the better school district neighborhoods tend to come with higher home prices.
Many real estate websites, including realtor.com and Zillow.com, now provide housing market data that include number of properties for sale, median days on market and median closing price with each listing. This information will help you better understand current inventory for properties in your price range and how quickly homes are selling in your target neighborhoods.
3. Get clear on what you want.
Now that you have a sense for what’s happening in your desired neighborhoods, you can start making some of the important decisions before meeting with a real estate agent:
- Where will you buy? In addition to the desired neighborhood and school districts, are you looking within a fixed radius around your office or close proximity to family or friends? Do you prefer to be close to public transportation or highways?
- What do you need? And what do you want? Narrow down your list of must-haves and nice-to-haves. What style of home is best for your family? How much space? What type of yard? What kind of floor plan? What additional structures are important to you?
4. Consider an experienced real estate agent.
You may think a real estate agent is someone you hire when you’re selling a house and who works with the seller’s real estate agent when buying.
But a buyer’s real estate agent is an invaluable resource to have in your corner when you’re in the market for a new home. Your real estate agent — sometimes called a buyer’s agent or buyer’s broker — can offer market insights, schedules home tours, connect you with trusted professionals, negotiate on your behalf and help you navigate problems that arise.
What many people don’t realize is that using a real estate agent when you purchase a home typically costs you nothing. Instead, your real estate agent’s commission is generally paid out of the seller’s agent’s commission that’s provided by the homeowner.
5. Be ready to make a decision quickly.
In a seller’s market, homes rarely stay on the market long. So when the right house comes along, you will need to move quickly or risk missing out on the home altogether. Your real estate agent can help you determine a fair and competitive offer to make.
Ready to buy your new home? Living in a seller’s market doesn’t mean that you’re doomed to the losing end of a bidding war. With some smart planning and the right resources, you can stand out from the crowd and close on your very own dream home.