Homebuying in a Hot Market–What You Need to Know
Amid fierce competition, fortune favors the bold.
More buyers competing over a smaller number of homes means you have to take extra steps to make your offer stand out. Even a strong offer can be rejected when the housing market favors the seller. But with a little patience, persistence and these tips, you’ll be on your way to finding your happily-ever-after home. Here are five things you can do.
1. Change your approach. A typical homebuyer’s approach is to view the property, go home and run the numbers, and then return to the property for a second look. But when time (and competition) is tight, you need to run the numbers and secure financing first; that way you’ll have a mortgage preapproval and be ready to make an offer as soon as you find the house you want.
2. Act fast. When you find your dream house, it’s important to avoid delay. You need to be emotionally and financially ready to make an offer right after seeing a home you like.
3. Understand the buyer-seller dynamic. Recognize that you have less negotiating power in a seller’s market. Don’t try lowballing your offer with the hope of negotiating a more favorable price. Be ready to go with the strongest offer you can make, and don’t be shocked if it means paying more than the seller’s asking price.
4. Buy unconditionally. Many home offers will include a home inspection contingency, where the buyer can negotiate the sales price, request repairs or even withdraw an offer based upon the results of a professional home inspection. Skipping a home inspection can be a risky way to make your offer stand out, but there are alternatives. Rather than requiring an inspection contingency, request an informational inspection—you’ll get a full professional inspection but won’t require the seller to pay for anything it uncovers.
5. Give them a deadline. Since your ultimate goal is to get your offer accepted, avoid asking for anything extra. But you and the seller share a goal—you both want the house to sell—and you can use that to your advantage and keep things moving by giving the seller a 24-hour deadline to provide their response.
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