Home buyers who typically wait until the winter to start their house hunt due to less competition might find some extra company this year as many folks who have been on lockdown for much of spring are shopping right now.
That means that buyers likely will be looking at a seller’s market, complete with low inventory, high prices and bidding wars. No need to worry, though, you’ll just have to adjust your house hunt in new ways to suit the times. Here are five tips that can help you be settled into your new home by the start of the year.
1. Secure your financing right away
It’s more important now than ever before to get pre-approved for a mortgage and secure financing before you even start looking for a home. That way you’ll not only have a clear picture of how much house you can afford, but you’ll also be able to make an offer as soon as you find your dream home. Oftentimes, buyers neglect to line up their financing until they locate a home that want to purchase.
In the current competitive market, however, you could lose out on a home you love if you wait to get pre-approved. Getting the process started early also could help you lock in an ultra-low interest rate, which could affect your monthly mortgage payment and enable you to afford a more expensive home.
2. Know what you want before you house hunt
The pandemic has changed how we live and work. As such, we’re spending much more time at home, and people are looking for different features in their living spaces. That’s why you’ll want to be sure and make a list of your must-have items before you begin shopping for a house.
Most importantly, you’ll want to share your needs with your real estate agent because it can help reduce the number of homes you’ll have to view before finding the perfect one. In a competitive landscape, knowing exactly what you want helps you act fast when you want to make an offer.
3. Tour homes virtually first
More real estate agents are using virtual tours and remote showings to ease their clients’ safety concerns during the continuing pandemic. In some cases, they also are limiting in-person showings to the most serious buyers—those with financing already secured, for example.
Virtual home tours via applications like Zoom and FaceTime let you view the home from anywhere, and depending on the setup, you might be able to ask questions in real time. So, you’ll be able to narrow down the homes you’re most interested in and physically visit only the ones that best meet your needs.
4. Don’t wait if you decide to make an offer
In September, there were almost 40 percent fewer homes on the market than during the same time last year, according to a realtor.com report. At the same time, buyer demand has increased, creating a more competitive marketplace. Homes were on the market for an average of 54 days in September, 12 fewer days than last year.
If you have just a few homes to consider, you’ll need to act fast if you’re interested, especially with all the other buyers in a location also looking at those same houses. If you wait too long to submit an offer, another buyer could swoop in with an offer of their own.
5. Make your offer stand out
Since inventory is so low, sellers are getting multiple offers on their homes. So, to make sure your offer is accepted, it should stand out. Cash offers and inspection waivers are a couple of ways to make your offer more appealing. If you can afford it, a cash offer is attractive to sellers because it eliminates dealing with a mortgage lender and often speeds up closings.
An inspection waiver comes with lots of risks, since you’re essentially agreeing to purchase a home as is, but the waiver removes any repair negotiations and helps you close quicker.
For competitive markets, where you know you’ll be competing directly with many buyers, you might want to talk to your agent about escalation clauses. This is a contract addendum where you agree to pay more than other offers (up to a set maximum).