HOW TO BUY A HOME IN A COMPETITIVE MARKET
The real estate market is booming right now. Thanks to possible higher rents and mortgage payments in the near future, many people are deciding it’s time to make the leap into homeownership. It’s a seller’s market for sure, making it a competitive one for homebuyers.
The good news is if you’re in the market for a new home, following the tips below can give you a leg-up on the competition and make it possible to secure the house of your dreams.
GET PRE-APPROVED FOR A MORTGAGE
Before you even begin looking at houses, get pre-approved for a mortgage. It’s important to note here that pre-approved and pre-qualified are two different things.
Pre-approved means a lender has already looked at your credit, income, and expenses to determine how much home you can afford using their underwriting guidelines.
Pre-qualified simply shows the amount of house you can afford based on your income. It doesn’t mean that a lender will approve you for a loan.
Having a pre-approval letter in hand when looking at homes shows you’re a serious homebuyer.
SUBMIT A CLEAN OFFER WITH NO CONTINGENCIES
If you submit an offer with contingencies, the seller may pass over it for one that has no stipulations. Contingencies like needing to sell your current home before closing on the new one will quickly send your offer to the bottom of the pile. Try to submit an offer clean of contingencies to show you’re serious about buying a home and closing on time.
MAKE AN APPEALING NET-PRICE OFFER
The net price is the amount the seller gets after everything is said and done. The less they have to pay for, the more money they put in their pockets when the home sells. Try to make sure they get as much money as possible by not making them pay for things like closing costs. Anything that makes them have to shell out more cash in the sale could cause them to turn down your offer.
MAKE A SIZEABLE DOWN PAYMENT
Submit an offer with a sizeable down payment. At the time of this writing, the average down payment is nearly 8 percent of the median sale price. The reality is, sellers are more likely to accept an offer with a larger down payment because they feel the bigger down payment will put the buyer in a better position to qualify for a mortgage.
DON’T IGNORE THE FIXER UPPER
Many homebuyers will pass over homes that need fixing up. It can be difficult living through a home renovation, but if you can purchase the house for a decent price, it may be worth it to get the house of your dreams in the end.
If you’re looking to purchase a home that needs more than just a coat of paint and some new carpeting, do your homework when it comes to hiring contractors to get the job done. Check with some of the non-profit housing organizations for recommendations on construction professionals for your renovation.
The housing market is a competitive one for homebuyers these days, but when you come prepared, you can beat out the competition to secure the home of your dreams. Use the tips above to be a serious contender in a hot real estate market.
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